The three-time Champions League winner with Real Madrid is Villa’s fourth signing of the winter transfer window after Marcus Rashford, Donyell Malen and Andres Garcia.

Villa will reportedly cover the 29-year-old’s wages but do not have an option to make the move permanent.

Asensio has scored seven goals in 47 appearances for PSG since joining from Real Madrid in the summer of 2023.

He helped the club win the French title last season, but this term he has made just eight league starts.

He was also part of the Spain squad that won the Nations League in 2023.

Villa boss Unai Emery said his side needed new players following Saturday’s 2-0 defeat at Wolves, which left the club eighth in the Premier League.

“Unai is a coach that I’ve known for a while,” Asensio told Villa’s club website.

“He’s had a great career, he’s a top coach, he’s been key in me being able to come here because of his idea of how he wants to play football.

“I love it – it suits me perfectly and he’s a really important person as to why I’m here right now.”

Villa sold Colombia striker Jhon Duran to Saudi Pro League club Al-Nassr in a £71m deal and centre-back Diego Carlos to Fenerbahce for about £8.45m.

Earlier on Monday they loaned 21-year-old winger Samuel Iling-Junior to Middlesbrough for the rest of the season.

Villa completed the loan signing of Manchester United forward Rashford, 27 – which includes an option to buy for £40m – on Sunday.

Netherlands forward Malen, 26, joined Villa for £19m from Borussia Dortmund three weeks ago, while Spanish full-back Garcia, 21, joined from Levante for a reported fee of £6m with a further £1m in add-ons.

Asensio could make his Villa debut alongside Rashford against Tottenham in the fourth round of the FA Cup on Sunday (17:35 GMT) – a match that is live on BBC One and iPlayer.

Villa are also in the last 16 of the Champions League.

By Nick Mashiter

Villa prioritised versatile attackers this month and in Asensio they have one.

He, Rashford and Malen can all operate across the front three, giving Villa excellent forward options to compliment Ollie Watkins.

Emery is a master of bringing the best out of players – under him Watkins and Ezri Konsa have become England squad regulars and Morgan Rogers has excelled since joining from Middlesbrough a year ago.

Asensio will hope to have a similar impact.