Raheem Sterling gave City a first-half lead before Joel Matip grabbed a late equaliser for Liverpool in the annual curtain-raiser to the English top-flight season.
In the shootout, City keeper Claudio Bravo saved from Georginio Wijnaldum, with Gabriel Jesus driving in the winning kick after successful efforts from Ilkay Gundogan, Bernardo Silva, Phil Foden and Oleksandr Zinchenko.
“It was a really tough game,” City midfielder De Bruyne told BT Sport. “You can still see it’s early pre-season. Both teams are not physically ready yet. It’s nice to see the competition and we will fight each other again this season.
“Some guys just came back two days ago, others have trained two or three weeks. Pre-season is more commercial these days so August is important.”
Manchester City defender Kyle Walker said: “It’s the first trophy you can win, for me growing up this was a big one. It starts off the season and hopefully we can replicate what we did last season.”
Pep Guardiola’s City, who won an unprecedented domestic treble last season, are favourites to win the Premier League for a third successive season while European champions Liverpool are expected to present the strongest challenge.
The new Premier League season kicks off on Friday with Liverpool hosting Norwich.