Pep Guardiola's side had led 1-0 against Sparta Prague at the Etihad Stadium, with Phil Foden giving the hosts the lead over the Czech team.
Haaland doubled the advantage in stunning fashion after being set-up by Brazilian winger Savinho.
Savinho's cross had arrived into the box at an awkward height for Haaland, but the Norwegian twisted his frame to connect with an acrobatic back heeled volley.
Haaland made the ideal contact to send the ball beyond the dive of Sparta Prague goalkeeper Peter Vindahl.
Erling Haaland scored a stunning goal for Man City to double their lead over Sparta Prague
The 24-year-old's athleticism was hailed by TNT Sports co-commentator Glenn Hoddle, who labelled the effort as an 'amazing goal'.
'Haaland's standing there not involved in the game. Savinho does really well, stops and starts him, crosses the ball.
Oh my word, off the back of his heel. He knows exactly what he's doing.
'The goalkeeper cannot read that, that is just an incredible finish.
Haaland's effort proved the highlight of a perfect night for Man City, as Guardiola's side eased to a 5-0 victory.
The forward scored his second of the night following a swift Man City counter attack, while John Stones and a Matheus Nunes penalty added to the scoreline.
Nunes compared Haaland's effort to a similarly acrobatic strike the forward had scored against Borussia Dortmund back in 2022.
'It was an amazing goal, I was speechless after his shot,' Nunes told TNT Sports.
'When he scored against Dortmund I was watching it on TV.
Man City's 5-0 win continues their strong start in the Champions League with seven points from three matches, placing them third in the league phase behind Aston Villa and Liverpool.
Haaland's brace on the evening takes the forward to 13 goals in 12 appearances for Man City this season.