Although both Melbourne and Vienna have registered improvements in liveability over the last six months, increases in Vienna's ratings, particularly in the stability category, have been enough for the city to overtake Melbourne.
The EIU said Manchester's jump in the rankings was due to an improved security score.
After seven years in the top position, Melbourne was bumped to number two, displaced by the Austrian capital, Vienna.
The highest ranked United Kingdom city was Manchester, which jumped by 16 places to 35th.
China's best ranked cites were Suzhou (74th worldwide), Beijing (75th), Tianjin (77th), and Shanghai (81st).
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The list ranks 140 cities on a range of factors, including political and social stability, crime, education and access to healthcare. Vienna got a score of 99.1, and Melbourne sits at an absolutely paltry 98.4. "The irony is this year it was our best score in eight years, coming in second", Melbourne Lord Mayor Sally Capp told journalists today. Osaka in Japan came in at three and the Canadian city of Calgary followed.
Last year, Singapore rose to its highest ever ranking at 35th in the annual survey conducted by the Economist Intelligence Unit (EIU).
"New York (57th), London (48th) and Paris (19th) are all prestigious hubs with a wealth of recreational activities, but all suffer from higher levels of crime, congestion and public transport problems than are deemed comfortable".
The ambition to be "The World's Most Liveable City" had been the slogan promoted by Len Brown, the first mayor of the amalgamated Auckland from 2010.
Manchester has shown "resilience" in the face of terrorism to extend its lead over London in a global "liveability" ranking.
Unfortunately, no United Kingdom city made it into the top ten.
But at the other end of the scale, Damascus managed a score of just 30.7 percent.