Chelsea's young loan star came close again when he turned Patrick van Aanholt's cross a few yards wide, with a deflection on its way through making it a tricky finish.
Palace appeared poised to get through to the break unscathed until Sane exchanged a wonderful give and go with David Silva, and an exquisite first touch from the German teed him up to poke past Wayne Hennessey.
The Citizens moved through the gears in the early stages of the second half and quickly made it 2-0 through Sterling, who side-footed home at the back post after being picked out by Sane's pinpoint delivery on 51 minutes.
The England international was teed up for another simple finish before the hour mark as De Bruyne lifted a cross to Aguero at the back post, and the Argentine cushioned the ball across goal for Sterling to tap home.
Sterling should have had a hat-trick when he tamely volleyed into the side-netting from Hennessey's spill, and he would not get another chance as he was soon substituted by Pep Guardiola with an eye on the midweek visit of Shakhtar Donetsk in the Champions League.
The Citizens continued to pour forward though and felt that they should have had a penalty when Timothy Fosu-Mensah pulled the arm of Sane as he threatened to go through one-on-one with Hennessey.
City did get their fourth through Aguero, who looked less potent today without the company of Gabriel Jesus up front. However, Sane further justified his starting position over the Brazilian with a wicked curling cross which Aguero headed home on 79 minutes.
Substitute Delph rounded off the scoring a minute from time with the pick of the bunch, arrowing a right-footed shot into the top corner to make the victory even more emphatic, and keep City top on goal difference.
Palace remain rooted to the foot of the table, without a point or a goal from their opening six games, and with matches against Manchester United and Chelsea to come.