Chambers’ contract at Arsenal still had six months to run but the Gunners have allowed him to walk away without collecting a fee.
The 27-year-old, who has three caps for England, is Villa’s fourth signing of the January transfer window.
Steven Gerrard’s side have already brought in the likes of Lucas Digne, Philippe Coutinho and goalkeeper Robin Olsen from AS Roma.
He has agreed a three-and-a-half-year contract at Villa Park.
Chambers joined Arsenal from Southampton in the summer of 2014 and has been a peripheral figure at the Emirates Stadium this term, making just five appearances in all competitions.
Chambers told Aston Villa's club website: "It's a massive club and they're in a great moment at this moment in time.
"It's a very exciting place to be and everyone can see that from the outside. Things are happening here and it's definitely moving in the right direction.
"For me, it was a no-brainer to join a great club. It was the right thing for me to do. It's a great club, it's a massive club. I've played at Villa Park a few times and it's great stadium with a great set of fans.
"The manager did very well at Rangers. He's a young, exciting manager and I can't wait to work with him.
"It's a great stage to be joining the club at. The club's building momentum and it's an exciting time to be here. You can really feel that being in and around the building. You can feel the energy around the place.
"I feel like I've joined at a great time and I can't wait to get started and give it my all."
