Sheffield United made a bright start at the Etihad Stadium and thought they had taken the lead when Lys Mousset found the back of the net after being put through by John Fleck.
The Blades’ celebrations were cut short, however, as a VAR review judged Mousset to have been marginally offside.
Mousset came close again just before the break but placed his effort just wide of the target and into the side netting with only keeper Claudio Bravo to beat.
City upped their game after the interval and took the lead on 53 minutes through Sergio Aguero.
The Argentine striker smashed the ball into the roof of the net from about 10 yards out giving visiting keeper Dean Henderson no chance.
The defending champions were denied a penalty for a handball by a VAR review with 20 minutes remaining but De Bruyne made sure of the result with eight minutes of normal time remaining.
Riyad Mahrez surged forwards before cutting inside and picking out De Bruyne.
The Belgian kept his shot low and beat Henderson with a powerful strike to ensure City would finish the year with a win in front of their own fans.
The Blades saw their unbeaten away record in the premier League ended as they suffered a first loss on their travels since January. Chris Wilder’s men sit in eighth spot in the Premier League table with 29 points, two adrift of Manchester United in fifth.
City stay third and they are 14 points behind pacesetters Liverpool.