Matched at a high of 34.033/1 in the Match Odds market, the Latics produced a defensive masterclass to prevent Pep Guardiola's star-studded side from progressing further in the competition, and therefore ending Man City's quest for a historic quadruple.
As expected City started the game on the front foot and could have been ahead inside two minutes but Sergio Aguero's header from six yards out flew over the bar.
Wigan always looked a threat on the counter attack during the first half but they received a huge boost just on the stroke of half time when Fabian Delph was sent off for what the referee deemed to be serious foul play.
Ten-man City still looked the far more likely team to break the deadlock, especially when Kevin de Bruyne entered the game midway through the second half.
But with just 10 minutes remaining Wigan striker Will Grigg ran at the City defence, found an opening, and curled home a low shot past Claudio Bravo from the edge of the box.
City tried desperately to find an equaliser, but Paul Cook's defence failed to crack and Wigan held on to repeat their famous 2013 FA Cup final win over the Citizens. The 1-0 scoreline was matched at 85.084/1 in the Correct Score market.
As Betfair spokesman Barry Orr Tweeted immediately after the game, over 7.5m Euro (£6.5m) was matched on Manchester City to win the match at prices down to a low of 1.141/7.
Despite the win, League One outfit Wigan can still be backed at 75.074/1 to win the FA Cup, and they will now host Southampton in next month's Quarter Final.
Manchester United are now the favourites to lift the trophy, available to back at 3.55/2, just ahead of Tottenham at 3.613/5 and Chelsea at 4.57/2.
Quarter Final draw in full
Man Utd v Brighton
Leicester v Chelsea
Wigan v Southampton
Sheffield Wednesday or Swansea v Rochdale or Tottenham