Manchester United's win was in vain as Manchester City's first-leg advantage squeezes them through to the Wembley final on March 1 against Aston Villa.
Nemanja Matic scored the only goal in the first half but was sent off in the second half as he received the second booking for foul on Gundogun.
United's gameplan was good, but Nemanja Matic's sending off after scoring was fundamental. City deserve to go to Wembley over the two legs.
City had a brilliant start to the game, dominating the match at United's own half with Aguero, Sterling, and Mahrez causing lots of trouble at the back.
There was a penalty appeal for the hosts as De Bruyne's deep ball into the box saw Sterling collide with Harry Maguire inside the danger zone. Referee Andy Marine said no to City's appeal and there was a VAR check. It looked clumsy from Maguire but the VAR gave no penalty as it seems the slip had convinced VAR that it was more of unlucky than sloppy.
United took the lead in the 35th minute and it was completely against the run for the minutes played. Fred's left-wing free-kick was cleared by Gundogan, but only as far as Matic. The Serb unleashed a fierce low shot from 15 yards, which beat Bravo at the near post.
Three minutes to half time, Sterling netted De Bruyne's cross but the goal was disallowed. He initially looked onside, but the flag went up. After a very, very short VAR review, the decision stood and he was offside.
Matic was on his last chance, and he had thrown it back in referee Andre Marriner's face. United had the ball around the edge of City's box for a good minute but then lost out. As Gundogan tried to get up the pitch, Matic hauled him back!
In the 85th minute, the ball kissed the net and Aguero started celebrating as he thought it would stand. Cancelo came piling forward and slipped a fine ball into Aguero, who flicked it past De Gea brilliantly. But once again the assistant referee on the far side gets it to spot on. He was half a yard offside.
- Man City become the 3rd team to reach 3 successive League Cup Finals after Nott'm Forest (1978-80) & Liverpool (1981-84)
- Man City won the League Cup in each of last 2 seasons. Liverpool were the last team to win 3 successive League Cups in run of 4 wins (1981-84).