The Birmingham club are expected to introduce the duo formally either on Monday or Tuesday after bringing their search for Martin O'Neill's successor to a close.
Houllier, 63, is understood to favour becoming boss in his own right - although Villa want a directorial figure who can help plug the gap left by the walkout by O'Neill and his staff.
Experienced: Former Liverpool and Lyon boss Gerard Houllier
Villa owner Randy Lerner compiled a four-man shortlist, aimed at making a quick decision before Villa's next league outing at Stoke on September 13.
Sven Goran Eriksson failed to impress and Houllier's greater experience and pan-European contact base were favoured over Alan Curbishley.
No-gos: Alan Curbishley (left) and Sven Goran Eriksson were approached by Villa
Lerner was keen to hand MacDonald a job in the set-up, but it was the failure to progress in the Europa League - and not the 6-0 hammering by Newcastle - that cost him the chance to manage in his own right.
It appears the ex-Liverpool midfielder, 49, will be given first-team coaching duties with the Frenchman directing from above.
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