The Villans beat Al-Nassr for Diaby’s transfer despite the Saudi club’s lucrative offer.
The signing will cost Villa €60 million, including add-ons, meaning Diaby has surpassed Emiliano Buendia as the club’s most expensive transfer.
The French winger has signed a five-year deal with the Premier League outfit until 2028.
Villa manager Unai Emery and sporting director Monchi have joined forces again to great effect, securing the high-profile transfers of Youri Tielemans and Pau Torres this summer.
Diaby has been one of Europe’s most exciting attacking prospects over the last few years.
The 24-year-old has bagged 49 goals and 48 assists in 172 appearances for Die Werkself and was included in the Bundesliga’s team of the season last term.
Emery, who had known Diaby from his time at Paris Saint-Germain, believed his arrival will significantly improve the squad.
“For us, Moussa Diaby is one player we were following,” said the Spanish gaffer.
“He’s helping us, trying to improve our level of play in the attacking third, sometimes playing on the right, sometimes he’s playing as a number 10 and sometimes he’s playing as a left winger.
“We are really excited and are really happy with him.
“We have to build our structure again and Moussa is giving us another important step ahead.”
Villa are looking to further reinforce their attack as they have identified Rennes youngster Jeremy Doku as their next top target.
They have had a €25 million bid turned down by the Ligue 1 club but plan to raise their offer to €30m, as they are determined to sign the highly-rated Belgian prospect.
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