He will be reunited with former captain Steven Gerrard, with the pair playing together at Anfield from 2013-15 and Gerrard now managing Villa.
Coutinho, who has won two league trophies and two Copa del Rey titles with Barcelona, has played 16 times for the club this season in all competitions and scored two goals.
The 29-year-old previously spent six years in the Premier League playing for Liverpool, where he made over 200 appearances and scored 54 goals.
Gerrard heaped praise on Coutinho on Thursday.
"If you go and have a look at his Wiki page you'll see a serial winner wherever he goes. He's won 63 caps for Brazil, played for Barcelona and was incredible at Liverpool," Gerrard said.
"I don't think you get a nickname of 'The Magician' if you're not a special footballer."
The agreement, subject to a medical and a work permit being granted, includes the option to make the transfer permanent, Villa said.
Coutinho joined Barcelona in January 2018 for approximately 142 million pounds ($192 million) but has not been able to establish himself in the first team at Camp Nou and he spent the 2019-20 season on loan at Bayern Munich.
He scored 26 goals in 106 appearances for Barcelona and has 18 months left on his contract, which expires at the end of the 2022-21 season.
Villa are 13th in the Premier League standings and return to action on Jan. 15 when they host Manchester United. ($1 = 0.7382 pounds)