Villa have been without a permanent manager since Martin O’Neill decided to quit the club last month.
“I am very happy and proud to join this great and historic club,” Houllier said.
“It was a very difficult decision for me to leave the FFF, but I could not turn down the opportunity to manage a club whose approach, both on and off the pitch, I have long admired.
“Aston Villa is one of England’s biggest clubs and has an amazing set of fans.
“This is a tremendous challenge and one I am very much looking forward to taking on.”
