The Championship club confirmed the news on Monday and Terry expressed his delight at joining a club that he had "admired from afar for many years". Reports suggest that the former England international has signed a one-year deal with Villa and he will look to help the club return to the Premier League.
Ahead of the new season, Steve Bruce will have to figure out how best to fit the veteran into his plans, with the likes of James Chester and Nathan Baker also vying for the centre-back position.
Either way, Terry, who will wear the number 26 jersey at his new club, is determined to show that he still has plenty to offer despite the fact he will turn 37 this year.
So, what are Villa getting with Terry? Goal takes a look at the defender's career to this point.
TERRY'S CHELSEA CAREER
John Terry was born on December 7, 1980 in the suburban London town of Barking. One of his earliest forays into football was with the amateur team Senrab - a local club that he would later return to in order to help out financially. Though he spent a brief period with West Ham, Terry joined Chelsea at the age of 14 and it was a decision that would alter his life forever.
Initially a midfielder, he was converted into a defender and quickly progressed through the ranks at Stamford Bridge, making his debut for the club in 1998 before gradually maturing into one of the most iconic players in the Blues' history.
Having made intermittent first-team appearances and enjoyed a loan stint at Nottingham Forest, Terry became a fully fledged member of the senior side during the 2000-01 season.
He learned his trade alongside the likes of Marcel Desailly and soon, at just 23, succeeded the Frenchman as club captain when Jose Mourinho elevated him to the position for the 2004-05 season.
Terry enjoyed a hugely successful 22 years at Chelsea, winning a total of 15 major honours including five Premier League titles, five FA Cups and the Champions League.
The centre-back featured a total of 717 times for the club and brought the curtain down on his time in west London at the conclusion of another title-winning campaign.
TERRY'S INTERNATIONAL CAREER
As well as flourishing at club level, Terry evolved into one of England's best defenders and earned 78 caps for his country, scoring six times before retiring in September 2012.
He made his breakthrough into the team during the reign of Sven-Goran Eriksson and his international bow came as a substitute in the 2-1 friendly win over Serbia and Montenegro in 2003.
In 2006, Terry was appointed England captain by then boss Steve McClaren, who declared: "I'm convinced he will prove to be one of the best captains England has ever had."
He represented the Three Lions at four major tournaments, featuring at the World Cup in 2006 and 2010 as well as the European Championship in 2004 and 2012.
Terry's career has been beset by controversy. In 2001, he was part of a group of Chelsea players (also including Frank Lampard and Jody Morris) who were fined by the club for a night of drinking that saw them accused of behaviour that upset American tourists in the wake of the September 11 attacks.
In 2002, Terry appeared in court along with fellow players Morris and Des Byrne over allegations of affray following a brawl at a London nightclub. However, all three were subsequently cleared of the charges.
Terry found his personal life firmly thrust into the public eye in 2010 when allegations that he had engaged in an affair with the wife of his former Chelsea team-mate Wayne Bridge emerged.
The unseemly saga was played out in the pages of tabloid newspapers and the defender was even stripped of the England captaincy temporarily, though he was later reinstated.
Bridge also refused to shake Terry's hand when, a short time after the allegations emerged, he faced Chelsea with Manchester City in a Premier League match.
In late 2011, Terry once again hit the front pages when he was charged by police with racially abusing Anton Ferdinand, the brother of his England team-mate Rio Ferdinand, during a match between Chelsea and QPR.
The judge presiding over the case admitted that there was no doubt in his mind that Terry had said the offensive remark, but since it could not be proved that it was intended as an insult he was found not guilty.
Not restricted by the same burden of proof as the courts, however, the Football Association reached a different verdict months later in 2012. Terry retired from England duty when he found out the FA was pursuing the case through its own disciplinary bodies and he was eventually found guilty and slapped with a four-match ban and a fine.
He had been removed as the captain of the England team - leading to Fabio Capello's resignation - while the court case was ongoing earlier in the year but was picked for Euro 2012 by Roy Hodgson, Capello's successor.
Terry's overzealous celebrations after Chelsea's 2012 triumph in the Champions League final have become the stuff of legend and the incident has been widely lampooned.
Despite not playing against Bayern Munich due to suspension, the captain appeared on the pitch in his full kit after the game in order to lift the trophy, a decision that prompted mockery from far and wide.
Terry's 'full-kit' celebrations even spawned a series of internet memes, with the defender edited into famous historical moments seeking to soak up the limelight.
TERRY ON SOCIAL MEDIA
Terry regularly uses Instagram to connect with his fans, posting updates from his training schedule and giving supporters a behind-the-scenes look at his family life.
Villa fans, then, will be able to stay up to date with their new arrival's life as he settles in to a new way of doing things at the Championship club.