Philippe Coutinho is on a loan from Barcelona.
The option to buy is included in the agreement and the player will travel to the city in the next 48 hours.
Villa is an ambitious club that are building something special for the future, and that is why Coutinho wanted to return to England and play regular football.
The Brazil player knows Steven Gerrard from their time together atLiverpool, and is said to know a lot about Villa and their squad.
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Sky Sports News has been told that there is a chance that Coutinho could return to the club this month.
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We take a look back at some of Philippe Coutinho's best goals in the premier league.
It is understood that the Reds did not pursue a move for the 29-year-old during the January transfer window.
After signing for Barcelona for a club-record fee of over one hundred million dollars in January of last year, Philippe Coutinho has struggled to hold down a first-team place at the club and spent the last season on loan at German club FCB.
Coutinho is a serial winner.
Steven Gerrard said on Thursday that he would sign Coutinho.
"He's linked to a lot of football clubs because he was an incredible player atLiverpool, so I can understand why he's linked to them," said the captain.
I can understand why people are talking about him. I don't think you get a nickname as a magician if you're not a special footballer, so he's someone I have an incredible amount of respect for.
He belongs to Barcelona, so I don't want to add to that speculation.
The analysis shows that Coutinho could fill the void.
I love that guy.
Jack Grealish is on February 4, 2015.
One of Jack Grealish's favourite players to watch was Philippe Coutinho. "He always has that one, where he goes left and drops a little shimmy, which is what I like doing myself." The journey has come full circle.
While Grealish was able to earn a £100m move to Manchester City, Coutinho was able to replace him at Villa. It will be an ideal signing if the Brazilian can repeat the form that took him to Barcelona.
There are similarities between the two players. Grealish praised the ability of Coutinho to go past players who aren't there and that is what Villa loved about their former captain. They missed out on the player who can make things happen.
Is Grealish still idolising the Coutinho? His career has been drifting at Barcelona since he left the team, but there is time for him to regain his best form. If Grealish is inspired by being the main man at Villa Park, there is fun to be had.
Sky Sports has a January transfer window.
Who will be moving in January?
The January transfer window closes at 11pm on Monday January 31.
Sky Sports has a dedicated Transfer Centre blog where you can keep up-to-date with all the latest news. Sky Sports News has the ins, outs and analysis.