Guardiola led City to a third Premier League title in four seasons, 12 points ahead of closest rivals Manchester United, and a fourth consecutive League Cup.
City will face Chelsea in the Champions League final in Porto on Saturday as they try to win the competition for the first time.
The other five managers who received the most votes to be shortlisted for the award were: Marcelo Bielsa (Leeds), Daniel Farke (Norwich), Emma Hayes (Chelsea Women), David Moyes (West Ham) and Brendan Rodgers (Leicester ).
Guardiola had previously won the award – voted on by fellow managers – in recognition of overseeing City’s record-breaking 2017-18 campaign when they became the first team in England’s top flight history to reach 100 points in one single season.
“I’m delighted to win this award for the second time, but an award like this is only possible if a manager is surrounded by top professionals,” Guardiola said.
“My players have been fantastic – their dedication and professionalism has never wavered, even in what has been the most difficult season we have ever faced.
“And my staff also deserve the highest praise. I’m so lucky to have a team of people who give their all every day to make sure Manchester City are the best we can be. “
“This award is dedicated to them and shared with them. “
Sir Alex Ferguson, LMA Executive Committee member, added: “As well as being a truly gifted manager and leader, you still demonstrate admirable humility and composure and I am sure your family must be very proud of you. “
The former Barcelona and Bayern Munich boss, who joined City ahead of the 2016-17 season, signed a new contract at the Etihad stadium until 2023 last November.
City football manager Txiki Begiristain added: “Pep deserves this award, absolutely. Winning the Premier League and the Carabao Cup, as well as reaching the Champions League final, in the most grueling season we’ve ever seen, says a lot about its quality. As a manager.
“He has shown an exceptional ability to constantly innovate. With the challenges presented by COVID-19, he had to adapt to a new way of working. He did it brilliantly and our results say everything you need to know.
“And it’s not just the results – the way we played was fantastic. The style of football is exactly what we expect from a Manchester City team. “
Norwich head coach Daniel Farke, Hull boss Grant McCann and Cheltenham manager Michael Duff were elected by their peers as Manager of the Year after leading their clubs to Championship, League titles respectively 1 and Ligue 2.
Emma Hayes won the Barclays FA WSL Manager of the Year award, following a voting process involving WSL managers, a panel of respected Barclays figures in women’s football and a public vote.
Hayes is also the first women’s football coach to be among the top six contenders for the LMA Manager of the Year award.
Jonathan Morgan has also been credited with leading Leicester to the Women’s Championship.
Rangers boss Steven Gerrard received the LMA Special Achievement Award for being undefeated throughout the Scottish Premiership season as the club claimed the league title.
LMA General Manager Richard Bevan said: “Tonight we celebrate the successes and efforts of all of our members during one of the most difficult seasons in modern gaming history. “
Complete list of LMA 2020/21 annual award winners:
The Sir Alex Ferguson Trophy for LMA Manager of the Year:
Pep Guardiola (Manchester City)
Barclays FA Women’s Super League Manager of the Year:
Emma Hayes MBE (Chelsea)
FA Women’s Championship Director of the Year:
Jonathan Morgan (Leicester City)
Sky Bet Championship Manager of the Year:
Daniel Farke (Norwich City)
Sky Bet League One Manager of the Year:
Grant McCann (Hull City)
Sky Bet League Two Manager of the Year:
Michael Duff (Cheltenham City)
LMA Special Prize:
Steven Gerrard MBE (Rangers)