The 22-year-old has passed a medical in Birmingham and has already agreed personal terms on a four-year contract that will come into effect at Villa Park once the obligation is triggered.
Neither club has disclosed the specific terms of that clause, though it is understood to be tied to the number of appearances Garnacho makes for Villa next season. Chelsea are confident the threshold will be met and that they will recoup their original valuation of £43m for the Argentina international.
The move comes just days after Chelsea completed the signing of Morgan Rogers from Aston Villa for a club-record £117m, with Garnacho's departure effectively forming the other side of that swap. He becomes Villa's fourth arrival of the summer, following Johan Manzambi, Joao Gomes and Modou Keba Cisse through the door.
Villa have also been busy offloading players, banking close to £200m in sales that include Youri Tielemans, Donyell Malen, Enzo Barrenechea and Lewis Dobbin.
For Chelsea, it brings a swift end to a Garnacho spell that lasted less than a year. The winger joined Stamford Bridge from Manchester United last September for £40m, in a deal that leaves United entitled to 10% of any future sale.
He struggled to make the impact Chelsea had hoped for, managing just one Premier League goal from 24 appearances across his debut season, and had fallen down the pecking order following the arrivals of Rogers and Sporting winger Geovany Quenda.
The Garnacho deal is the latest piece of business in what has been a busy summer of change at Stamford Bridge, with Chelsea having already spent close to £300m on new attacking additions including Joao Pedro, Liam Delap and Jamie Gittens before their spree continued with the Rogers deal.
For Villa, meanwhile, Garnacho's arrival adds fresh firepower out wide as Unai Emery's side look to build on last season's progress.
Having already balanced the books through a wave of outgoing transfers, the club will hope the winger, still only 22, can rediscover the form that made him one of the Premier League's most exciting young talents during his time at Old Trafford, where he scored regularly and was capped by Argentina.