Garcia received oxygen on the pitch and was stretchered off with his neck in a brace after colliding with his own goalkeeper Ederson during the closing stages of City’s 3-0 win.
Having received a lengthy spell of treatment from City’s medical staff, the 19-year-old underwent further tests at Manchester Royal Infirmary Hospital as a precaution on Wednesday night.
Garcia was released on Thursday morning and returned to the City Football Academy, where will be monitored by the club ahead of a return to training and competitive action.
Despite his release from hospital, the injury is likely to rule Garcia out of Burnley’s visit to the Etihad on Monday night and may pave the way for John Stones to return to Pep Guardiola’s match day squad.
Ederson, who accidentally collided with Garcia after rushing out to make a clearance, has apologised to his team-mate for his part in the accident.
The Brazil goalkeeper posted a photograph of himself and Garcia together at City’s training ground on Thursday afternoon with the caption: “Well and back”.
Aymeric Laporte, who partnered Garcia in the centre of City’s defence against Arsenal, said the teenager “needs a couple of days to rest but he will be fine soon enough”.
Speaking after the final whistle, Guardiola said: “We are concerned about Eric. The doctor told me he was conscious and we’re going to do everything to be sure that everything is fine and well.”
Garcia’s potentially serious injury overshadowed an otherwise excellent return to Premier League action by the defending champions, who denied former City assistant Mikel Arteta victory on his return to the Etihad.