Following a goalless first half, second-half strikes from substitutes Memphis Depay and Yannick Carrasco put the La Liga giants into a two-goal lead, and they managed to hold on for victory despite a late header from Ruben Dias.
The game was initially due to kickoff at 12:00pm UK time, but torrential rain and surface water on the pitch in Seoul forced the friendly to be delayed by 40 minutes.
Man City confirmed prior to the rescheduled kickoff that post-match media duties have been cancelled to give the players and staff sufficient time to board their flight back to Manchester.
Pep Guardiola made four changes to the City side that beat Bayern Munich 2-1 on Wednesday, with Erling Haaland, former Atletico man Rodri, Phil Foden and Aymeric Laporte - the match-winner against Bayern - all coming into the first XI at the expense of Mateo Kovacic, Rico Lewis, James McAtee and Nathan Ake - the latter of whom was fit to make the bench despite sustaining an ankle problem last time out.
As for Atletico, summer signings Cesar Azpilicueta and Caglar Soyuncu were both handed starts in defence, while the likes of Antoine Griezmann, Alvaro Morata, Koke, Rodrigo De Paul and former Man City defender Stefan Savic were also handed starts. However, there was no sign of Joao Felix in the matchday squad amid uncertainty over his future at the club.
In front of a sell-out stadium filled largely with sky blue supporters, Man City made a bright start to the match and came close to opening the scoring seven minutes in, but Jan Oblak was equal to Haaland's low shot inside the penalty area.
While Atletico posed a threat on the counter-attack, they largely had their backs against the wall as City dominated the first 25 minutes, with Foden, Julian Alvarez, Bernardo Silva and Jack Grealish in particular all causing havoc in an around the Spanish side's box.
In a high-tempo first half filled with robust tackles, Azpilicueta was booked for a foul on Grealish early door, but that did not stop the former Chelsea man from making several more niggling challenges to the frustration of City's No.10.
Shortly after Alvarez hit a tame effort towards Oblak, the best chance of the first half fell to Morata on the half-hour mark, but the Atletico striker failed to hit the target with a close-range header after receiving a brilliant cross down the left from Samuel Lino.
Foden then flashed a decent effort narrowly past the post at the other end, before another dangerous cross from Lino picked out Thomas Lemar who was presented with a gaping goal, but a poor first touch allowed Ederson to foil the danger.
Both teams made changes in goal at the break with City shot-stopper Stefan Ortega coming on for Ederson, while Atletico's Oblak was replaced by Ivo Grbic.
The two goalkeepers were called into action straight away, with Grealish closing down Grbic and forcing Atletico to concede possession, before Ortega brilliantly clawed out Lino's header from point-blank range following a corner.
The second half started as lively as the first, and Man City almost broke the deadlock seven minutes after the interval when Bayern Munich-linked Kyle Walker - captaining Man City for the third successive friendly - rattled the crossbar with a thunderous 25-yard volley.
City rang the changes shortly after, with Walker one of eight outfield players to make way as Kovacic, McAtee, Lewis, Kalvin Phillips, Oscar Bobb, Sergio Gomez, Joao Cancelo and Manuel Akanji all entered the field of play; McAtee and Kovacic instantly combined, with the former teeing up the latter to blast a strike over from six yards out.
Atletico then made wholesale changes of their own on the hour mark as Diego Simeone opted to change all 10 outfield players, with experienced trio Saul Niguez, Carrasco and Depay among those to be given a run-out in the final half-hour, and it was the latter who made an instant impact to open the scoring.
Indeed, Depay ran into a central area from the left flank and played a neat one-two with Angel Correa on the edge of the penalty area before firing a powerful right-footed shot beyond Ortega, beating the German goalkeeper all ends up.
While City seemed to lose their rhythm after making mass changes, Atletico found their groove and improved following their alterations, with Depay almost adding a second in the 73rd minute, only for Ortega to make a fine reflex save before the rebound was fired over.
However, Atletico were able to double their lead just a minute later courtesy of another fine strike from a substitute, with Carrasco cutting inside from the left and breezing past Lewis before blasting a 20-yard effort into the bottom left-corner with aplomb.
Man City were handed a lifeline in their quest to restore parity when they pulled one back in the 85th minute courtesy of a towering header from Dias following a curling corner kick from Gomez.
Despite Man City's efforts to push for a late equaliser, Guardiola's men had to settle for their first loss in pre-season, while Atletico returned to winning ways after suffering a 3-2 defeat to a K-League XI on Thursday.
Man City will now fly back home as they prepare for the Community Shield against Arsenal at Wembley Stadium next Sunday, while Atletico will return to Spain to continue their pre-season preparations against fellow La Liga side Real Sociedad next Thursday.