Hosts dominate tie and will go onto to Reading as Houllier left to regret making numerous changes to his side.
City started the game the better and after a free-flowing move which included some delightful passing Ciaran Clark put the ball behind for a corner.
From the resulting corner Patrick Vieira’s header appeared to brush the arm of Clark but before City could appeal for a penalty Toure pounced on the loose ball and volleyed home from six yards.
Villa responded to the goal from the Blues and after a neat passing move down the left Gabriel Agbonlahor was unlucky to see his effort creep just wide as he cut in and fired vicious shot with his right-foot.
Youngster Barry Bannan then tested Joe Hart in the City goal with a decent effort from 30-yards but the England-man was equal to it and produced a decent save.
The Scot had another opportunity minutes later when Nathan Delfouneso raced down the right and cut the ball back to Bannan but his volleyed effort sailed over the bar, a chance he should have done better with as he was unmarked in the area.
City got their second of the game in the 25th minute when Toure chipped the ball over the Villa defence which Balotelli raced onto and the Italian made no mistake hitting a side footed volley beyond Freidel to confirm their domination of the game.
Gerard Houllier’s had a decent chance to get a way back into the game when Emile Heskey ran at the City defence cut inside and unleashed a powerful effort at goal which Hart had to parry away and luckily for the Blues the ball did not land at the feet of a Villa player before it was hooked behind.
Villa had a decent spell f possession before the break to end Roberto Mancini’s side dominance of the game but failed to make any clear cut chances with the closest effort coming from Agbonlahor whose mazy run into the City box was emphatically stopped by Joleon Lescott.
In the second half Villa started the brighter of the two sides but were unable to capitalise on decent opportunities from corner especially Agbonlahor who could have done better as he failed to make contact when the ball landed at his feet yards from goal.
There was a moment of controversy involving Balotelli as he appeared to elbow Chris Herd in the face but referee Mark Clattenburg who failed to take action against Wayne Rooney for a similar incident at the weekend, only booked the Italian much to the fury of the Villa players.
City could have effectively ended the tie just after the hour mark when Vieira’s goal-bound header from Kolarov’s corner was cleared off the line by Fabian Delph to keep Villa’s hopes alive.
Roberto Mancini’s side were not to be denied though and they got their third goal in the 70th minute when Silva picked up Herd’s headed clearance just outside the box and rifled a powerful effort into Freidel’s left hand corner.
The home-side could have added another, moments later when a scramble outside the box presented Aleksandar Kolarov with a chance to strike at goal but his left-footed shot went just wide.
Carlos Tevez on for Balotelli could have made it four when he got round the back of the Villa defence but Freidel parried his effort out for a corner when the Argentinean fired a goal from a tight angle.
Ashley Young who was left out of the starting line-up by Gerard Houllier had a good opportunity to get a consolation for Villa but he uncharacteristically fired his free-kick over the bar without testing Hart from 20-yards.
City maintained their clean sheet as they strolled to victory against a lacklustre Villa side and will now play Reading for a place in the semi-finals.