Hamburg and Helsinki, who held tenth and ninth place previous year, have dropped out of the top ten.
The EIU said Manchester's jump in the rankings was due to an improved security score.
Canada performed well as well, with Toronto tying with Tokyo for seventh position on a score of 97.2% and Calgary (97.5%) and Vancouver (97.3%) taking fourth and sixth place respectively. The top-ranked American city is Honolulu, with a global ranking of 23.
China's best ranked cites were Suzhou (74th worldwide), Beijing (75th), Tianjin (77th), and Shanghai (81st).
The survey, which has been conducted annually since the 1990s, measures a range of factors including crime, education, access to healthcare, and social and political stability.
Most liveable cities in the world mapped with three Australian coming in the top 10
This year marks the first year a European city took first place, with the award going to Vienna in Austria.
In fact, three Australian cities entered the top 10 while another three came from Canada.
The EIU said Manchester had shown "resilience in the face of adversity" in the wake of the 2017 Manchester Arena terrorism attack.
Last year, Singapore rose to its highest ever ranking at 35th in the annual survey conducted by the Economist Intelligence Unit (EIU).
However, the researchers pointed out that wealthy financial capitals such as Paris (19th), London (48th) and NY (57th) tended to be "victims of their own success" with higher crime rates and overstretched infrastructure dampening their appeal. But this year's ninth place spot went to Copenhagen.
She added that security had also improved in "several western European cities".
Wore-torn Syria saw its capital of Damascus rank last on the list as the country's bloody civil war continues to drag on. It was followed by Bangladesh's Dhaka and Lagos, Nigeria's commercial centre.More news: Oil dips on rising US crude inventories
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