Emery, a former Arsenal manager, will take over as manager of Villarreal in Spain on November 1.
Villarreal received a £5.2 million buyout fee from Villa.
After Gerrard was fired last week following a 3-0 Premier League defeat by Fulham, caretaker Aaron Danks will take over at Newcastle this weekend.
Emery, who would have been out of contract at Villarreal next summer, will start work next week “after his work permit requirements are finished,” according to Villa.
They also stated: “Aston Villa is pleased to announce the hiring of Unai Emery as the club’s new manager.
“Unai is a very experienced top-level coach who has managed over 900 games. He previously coached in the Premier League with Arsenal, bringing the Gunners to the Europa League final.
“He has also had significant success at Sevilla and Paris St-Germain. Between 2013 and 2016, he won three consecutive Europa League crowns in Seville before going on to win a Ligue 1 championship in France, as well as two French Cups, two French League Cups, and two Trophee des Champions.”
Emery joined Villarreal in 2020 and guided them to Europa League glory in 2020-21, defeating Manchester United in the final.
Under Emery, the Spanish team also reached the Champions League semi-finals last year, losing 5-2 on aggregate to Liverpool.
Emery’s hiring at Villarreal comes following his dismissal as Arsenal manager after only 18 months, in November 2019, after failing to win in seven games, the Gunners’ worst run since February 1992.
During his stint in north London, he led Arsenal to the Europa League final, where they were defeated by Chelsea in 2019.
Villa beat Brentford 4-0 on Sunday under caretaker Danks – just their third win in 12 Premier League games this season – which left them 14th, three points above the relegation zone.
The club had also held talks with representatives of Sporting Lisbon coach Ruben Amorin.
‘Emery’s appointment is a proof of Villa’s ambition,’ says an analyst.
The recruitment of Unai Emery as manager of Aston Villa demonstrates the club’s ambition and commitment to build a name for itself in Europe.
Emery is an unrivaled European expert, having won the Europa League three seasons in a row with Sevilla before winning it again with Villarreal against Manchester United in 2021.
He has a great reputation and was the first choice of Newcastle’s Saudi Arabian owners until they hired Eddie Howe. Emery appeared to be on his way to Tyneside in November, only to alter his mind at the last minute.
Emery’s first goal will be to boost Villa up the Premier League table, and he will return to England as a manager with a lot to prove after being fired by Arsenal in 2019.
He succeeded Arsene Wenger, and despite being seen as a failure, Arsenal finished fifth in his full season in charge, and he once again displayed his competence in European competition, taking the Gunners to the Europa League final, where they were defeated by Chelsea.
Villa’s owners want the team to compete in Europe and seek a fresh start after dismissing Steven Gerrard after less than a year in charge.
They have got one of Europe’s most experienced, respected, and accomplished coaches in Emery, who will be driven by a passionate ambition to clear the record following his time at Arsenal.