Coutinho made a surprise loan switch to Villa Park in the January transfer window until the end of the season in search of regular first team football, reuniting him with Villa manager and former Liverpool teammate Steven Gerrard in the process.
Aston Villa had the option to sign the 29-year-old permanently at the end of this season which they have taken up.
Coutinho has made 16 appearances in the Premier League for Aston Villa so far, scoring four goals and providing three assists.
Coutinho's exit from Barcelona ends a turbulent four-year stint at the Camp Nou that did not live up to expectations.
He joined the Catalans from Liverpool for £142m in January 2018 and scored 26 goals in 106 appearances, spending time on loan at Bayern Munich in the 2019/2020 season.
“This is a brilliant signing for Aston Villa," said manager Steven Gerrard in a statement to the club's official website. "Phil is a model professional and his impact on the group has been very clear since he joined in January.
“With the way he conducts himself on and off the pitch, he’s also a valuable role model for our younger players who can only benefit from his experience.
“As we look to build towards next season, it is incredible to work at a club that executes its business so decisively and smoothly.”
