City produced an imperious performance on Wednesday to dismantle their Championship opponents in a game that was in stark contrast to the 1-1 draw in the first encounter at Ewood Park earlier this month.
Spain striker Alvaro Negredo put City in front with a powerful header in first-half injury time before doubling his side's advantage midway through the second half with a cool finish that marked his 21st goal of the campaign.
Edin Dzeko then added a third for last year's beaten finalists, who were handed a further boost in the second period as Sergio Aguero came off the bench to find the net in his first appearance since suffering a calf injury against Arsenal last month.
And the gloss on a scintillating display was applied in the closing stages, Dzeko turning home his second as City kept hopes of a quadruple-winning season very much alive.
City made eight changes from the side that beat Newcastle United 2-0 in the Premier League on Sunday, Negredo, Fernandinho and Dzeko the only players retained, while striker Jordan Rhodes and defender Scott Dann both missed out through injury for Blackburn.
The hosts made the better start to proceedings, Dzeko twice going close to opening the scoring in the first 10 minutes.
Blackburn soon managed to gain a foothold in the game, though, and provided frustrating opposition for City, who were largely reduced to long-range efforts in the first half.
However, City would have taken the lead had Negredo or Fernandinho been able to make contact with Jesus Navas' low delivery across the face of goal.
But Manuel Pellegrini's men finally broke the deadlock just before the interval as Negredo headed home Fernandinho's right-wing cross with a powerful close-range header.
Both teams made changes during the interval, Aleksandar Kolarov replacing Fernandinho for City and injured Blackburn goalkeeper Paul Robinson making way for Simon Eastwood.
And Negredo all but ensured City's place in the fourth round within two minutes of the restart, the Spaniard latching on to an excellent pass from Kolarov to lift the ball over Eastwood and net his 16th goal in 12 games at the Etihad Stadium.
City took their foot off the gas following that goal and Blackburn could have cut the deficit had substitute Joshua King taken either of two golden opportunities midway through the second half.
Blackburn were made to pay for King's profligacy in the 67th minute as Dzeko lashed home a Navas pull back to further illustrate City's dominance.
Aguero replaced Negredo five minutes later and made an instant impact as the Argentina striker turned home a lay-off from Dzeko, who converted a Navas cross 11 minutes from time to round things off and set up a fourth-round tie with Watford.
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