Houllier is parting company with the Premier League side because of concerns over his health after recent heart problems.
The announcement was made last night but it had been common knowledge for 24 hours that Houllier's reign was coming to an end after he underwent further medical tests before the weekend.
Houllier was unable to take charge of team affairs for the final five games of the season and doctors have advised that he will require further time to recuperate.
Villa chief executive Paul Faulkner said: "We regret the circumstances of Gerard's departure and we wish him well in his continued recovery."
Gary McAllister, Mark Hughes, Rafael Benitez, David Moyes and Steve McClaren are among the names being linked with the post.