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The Brazil international moved to Villa Park on loan in January and he made the switch permanent on Thursday afternoon.
Coutinho was initially set to cost £33 million, but Villa bagged him for £17 million and on much lower wages.
He was earning £480,000-per-week at the Camp Nou after joining from Liverpool in a blockbuster £125 million deal back in 2018.
The 29-year-old would've found it incredibly difficult to fit into Villa's wage structure if he didn't take a hit.
Coutinho will now earn £125,000-per-week after signing a four-year deal, which still makes him one of Villa's top earners.
It's been confirmed Barcelona have included a 50 per cent sell-on clause.
Since arriving late in the transfer window, the former Liverpool man has has scored four goals and registered three assists in 16 appearances.
His relationship with manager Steven Gerrard is strong and it's likely his ex-Reds captain played a huge role in his move.
Gerrard and Coutinho played together for two-and-a-half years before the former moved to LA Galaxy in 2015.
Speaking after the transfer had been completed, Coutinho said: "I am really happy and excited about the present and future. I’ve been made to feel very welcome since day one.
"I’ve enjoyed it so much. I believe so much in the squad that we can achieve really good things next year and I am really excited for the next season already."
Gerrard then spoke glowingly of Coutinho's impact on Villa's season, who sit 12th in the Premier League table and have three games left to finish in the top half.
"This is a brilliant signing for Aston Villa," he explained. "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."
Villa return to action on Sunday afternoon against Crystal Palace at 2pm.
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