The Brazilian international endured a miserable time of things at the Camp Nou after moving to Spain from Liverpool in a deal reportedly worth £142m.
The 29-year-old, who has scored four times and contributed three assists, has put pen to paper on a contract that runs until 2026.
“This is a brilliant signing for Aston Villa,” head coach Steven Gerrard said on the club’s website.
“Phil is a model professional and his impact on the group has been very clear since he joined in January.”
“FC Barcelona and Aston Villa have reached an agreement to transfer Philippe Coutinho for 20 million euro. The Club have inserted a 50% sell-on clause for any future sale of the player,” read a statement on the Spanish giants’ website.
“FC Barcelona would like to publicly state their thanks to Philippe Coutinho for his commitment and dedication, and wish him success and all the best for the future.”
Additional reporting from PA