Man City players celebrate Ball's equaliser at Preston
Two late goals denied Preston a chance of reaching the FA Cup quarter-finals.
Manchester City fell behind on eight minutes when Nugent lashed home from close in after Nicky Weaver could only palm away Michael Ricketts' header.
City responded when Michael Ball drilled home after Bernardo Corradi's acrobatic effort hit the post.
Preston seemed set for a replay before Georgios Samaras' shot was deflected in off Matthew Hill and Stephen Ireland capped the win with a stunning volley.
The defeat means Preston are still to beat top-flight opposition in the FA Cup since 1979 but they were by no means outplayed by their Premiership opponents.
And the visitors were made to work hard for their place in the last eight, with the scoreline flattering Stuart Pearce's side.
City began brightly, with four corners in the opening four minutes, but the home side took the lead from a corner of their own.
Danny Pugh's set-piece was firmly met by Ricketts' head, forcing Weaver into an athletic save. But with Nugent lurking and Weaver grounded, the 21-year-old was left to lash home the rebound for his 14th goal of the season.
City, inspired by the industrious Joey Barton, could have responded soon afterwards when debutant Seyfo Soley's slip allowed Samaras a half-chance from the edge of the box.
But Preston created the best of the first-half chances and Ricketts was presented with a magnificent opportunity to put Preston 2-0 up on 22 minutes.
Chris Sedgwick's defence-splitting through-ball gave the former England man a clear run on goal but Weaver stood tall and palmed away the left-foot strike to keep City in the game.
Nugent was again on hand to pick up the scraps but Richard Dunne, missing in action for the first goal, flung himself at the striker's snap-shot to block the danger.
Rickett's afternoon got worse later on in the half when he departed on a stretcher after an awkward fall on his shoulder.
Such was North End's dominance; the home support greeted every Manchester City touch with an ironic 'ole'. But their misplaced confidence was soon exposed when City snatched an exquisite equaliser on 35 minutes.
Corradi's acrobatic hook-shot crashed off the upright and when the bouncing rebound fell to Ball, he coolly drove past the helpless Andy Lonergan via the same post.
Nugent poached as Preston scored early
Hatem Trabelsi pierced the Preston defence at will down the right and narrowly fired over a decent chance after a flowing City move shortly before the break.
But it would have been harsh on Preston to go into the interval behind and their zest and enthusiasm ensured they remained a constant threat throughout the second half.
With very little to choose between the two sides, the lively, pendulum of a cup tie swung from one end to another without either side carving out goal-threatening chances.
Preston matched City's endeavour and intent but the visitors enjoyed the more purposeful passages of possession in the second period.
And the resilient Preston defence finally succumbed to the class of the opposition in the closing stages when Samaras' turning shot took two deflections - the first off Liam Chilvers, the last off Hill - before bobbling in.
It was the long throw of Ball that caused panic in the defence and Samaras took advantage of the indecision and forced his effort home.
With the tie all but over, Ireland emphatically volleyed home City's third to seal a hard-fought victory.
Preston manager Paul Simpson:
"They deserved to win but 3-1 flatters them. We came up against a quality side and in the second half we didn't test their goal enough.
"It was a tough test and it shows we haven't earned the right to go and play in the Premiership yet.
"Regardless of their position in the Premiership, there is a difference in quality between the two sides."
Manchester City boss Stuart Pearce:
"It was never easy especially when we went a goal down. We were patient and we didn't lose our shape or chase the game.
"We deserved to win the game and we played well in patches without ever keeping any consistency.
"We didn't give them too many chances on our goal and we stuck at it."
Preston: Lonergan, Alexander, Soley, Chilvers, Hill, Whaley (Mellor 86), Sedgwick, McKenna, Pugh, Nugent, Ricketts (Agyemang 42).
Subs Not Used: Nash, St. Ledger, Pergl.
Goals: Nugent 8.
Man City: Weaver, Richards, Dunne, Distin, Ball, Trabelsi, Barton, Dabo, Ireland, Corradi, Samaras.
Subs Not Used: Isaksson, Jihai, Hamann, Beasley, Sturridge.
Goals: Ball 35, Hill 85 og, Ireland 90.
Ref: M Riley (W Yorkshire).