United will go into the match on the back of a stunning 4-4 draw at home to Everton at Old Trafford here on Sunday that has revived a seemingly moribund title race.
Hours after they'd squandered 3-1 and 4-2 leads, Ferguson's men saw City reduce their lead at the top of the table with a 2-0 win at Wolves that also relegated the Black Country club.
And should City, who earlier this season thrashed United 6-1 in the league before losing 3-2 at home to them in an FA Cup clash, win at their Eastlands ground next Monday, they will return to the summit on goal difference with two games remaining.
"This is definitely the most important derby game I have been involved in," said Ferguson, in charge at Old Trafford since 1986. "It's game on.
"We have given them (City) the initiative, there is no question about that, and it makes next week a decider really.
"We've made it harder for ourselves, as we normally do, we have to go there but we know we are capable of getting a result. We need to get a result now at the Etihad Stadium, there is no question about that, but there is no reason we can't do that.
"There has been an expectancy from City that this could be their title decider but it is our decider too.
"There will be a reaction obviously, there is no question about that. It's a big game next Monday. It's always been a derby game of the highest proportions and this won't be any different."
United twice had a two-goal advantage, only to be undone by some nervous, defending, conceding two goals in the final eight minutes with Nikica Jelavic -- his second of the match -- and South Africa's Steven Pienaar drawing the Toffees level at 4-4.
Jelavic opened the scoring in the 33rd minute only for Wayne Rooney to equalise before the interval against his former club.
Danny Welbeck, Nani and Rooney -- with his 33rd goal of the season and 180th of his United career -- capped a period of three United goals in 13 second-half minutes although Marouane Fellaini's goal briefly made the score 3-2.
"It was a travesty," claimed Ferguson. "Some of our football was fantastic, the goals we scored were great goals.
"But to give away four goals at Old Trafford in a game like that, a game that's so important, I just can't believe it.
"I think it was defensive lapses. Their goals were really soft. We created goals by really good football but they got their goals easy.
"It was terrible defending from us. We've thrown it away, it's as simple as that. We just didn't deal with the balls into Fellaini, it's as simply that. Lack of concentration.
"It could be costly, there is no question about that. We've thrown a game away that we should be coasting and seeing the game out. But we didn't, so we have given ourselves a difficult task."
For Everton manager David Moyes, a superb display was the perfect response to the disappointment of defeat in the all-Merseyside FA Cup semi-final eight days earlier, although he had grounds for complaint after referee Mike Jones allowed United to score a second goal while an Everton player was down injured.
"I thought it was rubbish," said Moyes. "He stopped play for Jonny Evans but referees can do what they want, they can make their own rules up, and I thought he made his own rules up.
"Steven Pienaar was down for their second goal and you would have thought if he was being consistent he would have evened it up there. But he never did and they scored from it. I've got to say, I think the referee was poor."