The former Liverpool midfielder has left his role as Rangers manager to replace Dean Smith, who was sacked last weekend after a run of five successive defeats.
Gerrard guided Rangers to the Scottish Premiership title last season, finishing the campaign undefeated in the league and preventing Celtic winning a 10th championship in a row.
Villa chief executive Christian Purslow said: “The board of Aston Villa are delighted to appoint Steven as our new head coach.
“Since moving into coaching after his illustrious playing career, Steven began by managing and developing top young players in the Liverpool FC academy which is experience we value highly at Aston Villa.
The hilarious reason Newcastle United goalkeeper Nick Pope went viral on Twitter following Burger King tweet
Newcastle United transfer target confirms move ahead of official announcement
Newcastle United player ratings: 'Strong' Sven Botman outshone by 'man of the moment'
Newcastle United and Everton plot ‘£30m’ striker raid, Toon midfielder ‘expected to depart’
‘Data experts’ predict clear favourite in Newcastle United’s clash with Brighton and deliver Leeds United, Everton and Manchester United verdicts
“It has been very clear in our discussions with him that Steven’s coaching ambitions, philosophy and values entirely match those of Aston Villa.
“We are excited he has agreed to lead us in the next phase of our ambitious plans as we look to build on the progress made since Nassef Sawiris and Wes Edens took over the club in 2018.”
Gerrard admitted he was impressed with the club’s ambition despite currently being 16th in the Premier League, two points above the relegation zone, with just three wins this season.
“Aston Villa is a club with a rich history and tradition in English football and I am immensely proud to become its new head coach,” he told the club’s website.
“In my conversations with Nassef, Wes and the rest of the board, it was apparent how ambitious their plans are for the club and I am looking forward to helping them achieve their aims.
“I would like to express my sincere gratitude to everybody associated with Glasgow Rangers for giving me the opportunity to manage such an iconic football club. Helping them secure a record-breaking 55th league title will always hold a special place in my heart.
“I would like to wish the players, staff and supporters the very best for the future.”
Rangers expressed their gratitude to Gerrard and his backroom staff and wished them future success.
Ibrox chairman Douglas Park said in a statement: “I would firstly like to put on record my thanks to Steven for his outstanding efforts over the last three-and-a-half years at Rangers.
He has provided us all with some unforgettable moments, not least his delivery of the Scottish Premiership title back to Ibrox last season having not lost a match in the entire league campaign.
“In European competition, he has restored the good name and credibility of our club on the continent and leaves us in a very healthy position on the pitch.”