The 25-year-old moves to Villa Park on a four-year contract after three seasons in France.
Traore joined Lyon from Chelsea in the summer of 2017 and scored 33 goals in 126 appearances in all competitions.
Traore is Aston Villa manager Dean Smith’s fourth summer signing after Ollie Watkins, Matty Cash and goalkeeper Emiliano Martinez.
Smith told his club’s website: “We’re delighted that Bertrand has chosen to come to Villa.
“He’s a player with immense talent who will really enhance our attacking options.”
Traore will be reunited with Villa’s assistant manager John Terry, who was his teammate at Chelsea.
Traore’s arrival will boost Villa’s attacking options after Smith revealed forward Wesley will not return this year as he continues his recovery from a knee injury sustained in January.
When asked on the player's potential return, Smith said: "We believed it was going to be a 12-month injury and nothing has told us otherwise yet.
"It was quite a bad injury he suffered. He's back now with us but is not training in any shape or form yet.
"He's getting full range back into it and the swelling has gone down on his knee now. Hopefully he'll be back as soon as possible."
Aston Villa begin their season against Sheffield United on Monday.
