Ricky Mercer scored the winner on his return to the Dolly Blues as Phil Brown’s side recorded their second victory in three games.
Lancaster’s progress also saw them rise to 13th place as they completed a league double over the Albs.
A depleted City were without any recognised strikers on Saturday, with forwards Aaron Taylor, Matty Poole and Danny Carlton all unavailable for the match.
Wingers Zach Clark and Joe Whittington both took turns up front in a front-line that struggled to make any impact against a defensive home side.
Both teams opted to play five in midfield throughout the game, and the spectacle that resulted wasn’t great on the eye with chances at a premium.
In a game of few chances Winder’s drive from a wide angle that narrowly missed the far post was as close as the visitors came.
The host’s best chance in the opening stages was Alex Titchener’s mis-hit effort from just inside the box that was easily gathered by Mike Hale. Both sides lashed a couple of half chances from distance off-target as a lacklustre opening half was gratefully drawn to a close by the referee’s whistle.
The second half war of attrition continued in the opening stages, with both teams struggling to create openings, but City always looked the more likely to get an opening that arrived out of nothing on 63 minutes.
A free kick on the left wing found the feet of Ryan Winder to the left of the area who turned and fired a low cross into a crowded penalty area.
Ricky Mercer reacted fasted to hit a sweeping volley high past on-loan Liverpool keeper Andy Firth to what turned out to be the match-winning moment.
Both Tommy Watson and Charlie Russell also put in encouraging performances on their Lancaster debuts as the Dolly Blues shaded the physical midfield battle on the day.
City had a chance to double their lead after a driving run by Whittington created the chance to flash a low cross across an open goal that narrowly missed the toe of the sliding Zach Clark at the far post.
Hale remained untroubled in the City goal as the Dolly Blues held on to claim their first clean sheet of the season and a hugely lifting three points.
Lancaster City: Hale 8, Gregory 7, Mercer 8, Marshall 8, G.Clark 7, Winder 7, Akrigg 7, Watson 8, Russell 8, Whittington 7, Z.Clark 7.
Star man: Ricky Mercer. Winning goal to cap a great debut.