Watkins agreed on a five-year contract with the Premier League club, who could eventually pay up to £33 million if certain clauses are met.
The fee eclipsed the £22 million Villa spent to sign Wesley from Club Brugge last year.
Watkins scored 26 goals as Brentford reached the Championship play-off final last season before losing to Fulham.
Villa is believed to have turned their attention to the 24-year-old after Bournemouth striker Callum Wilson joined Newcastle on Monday instead of moving to Dean Smith’s side.
“Ollie has developed into one of the most sought-after strikers in the country and we are looking forward to seeing him show his great qualities in an Aston Villa shirt,” Villa manager Smith said.
Watkins, who joined Brentford from Exeter in 2017, has previous experience of working for Smith during the pair’s time at the west London club.
“I am so excited to join Aston Villa and to reunite with Dean Smith as my head coach,” he said.
“I cannot wait to wear the famous claret and blue in the Premier League. I want to do something special here and score some goals.”
Watkins is Villa’s second signing from the Championship since the end of last season following their swoop for Nottingham Forest right-back Matty Cash.