Gunners captain Odegaard was devastated by his team's second-half capitulation as Julio Enciso (19), Deniz Undav (26) and Pervis Estupinan (25) netted in front of the stunned Emirates Stadium crowd.
City will win the title for the fifth time in six seasons, and for a third year in a row, if Arsenal lose at Nottingham Forest on Saturday.
Even if Mikel Arteta's second-placed side beat Forest, the title will still go to City if the leaders win at home to Chelsea on May 21st or take three points in their other two matches at Brighton and Brentford.
Asked if the title race is over, Odegaard said: "Yeah it feels like that. It is going to be very difficult now we have to be honest. It is tough to take.
"It is not a good feeling at the moment. The way we played, particularly in the second half, I don't know what happened to be honest. It feels like there is no hope now."
After leading the table for long periods, Arsenal have blown their bid to win a first title since 2004.
A run of just two victories in their last seven games has proved decisive, with City racing to the finish line with a long winning streak.
Despite their late collapse, Norway midfielder Odegaard insisted his young teammates had been mentally tough enough for the pressure of the title race.
"We wanted to come here and continue like we have in the last two games, get a good result and keep pushing. It is a big disappointment," he said.
"In the first half we did a lot of good things and had moments to create big chances but we gave them more and more momentum in the second half.
"I don't think mentality was an issue. We were good going into the game but in the game was a different story and we have to accept it and learn from it."
