And Lerner is adamant there will be money to spend on new signings during the summer although Villa would not be able to bring in a £30million player.
O'Neill's future was constantly under discussion at the tail-end of last season after unsubstantiated speculation that his relation with American multi-millionaire Lerner had deteriorated.
But Lerner could not have been more clear cut in his statement that O'Neill will be at the helm for a fifth successive season with the midlands club.
Lerner said: "I gave Martin assurances that I also wanted to take the team forward. I want to make it clear that Martin will be back next year managing.
"That's been settled. We feel very good about that as it represents continuity for the players and in many other ways.
"Let me say again, Martin O'Neill will be the manager next season. He has definitely agreed and I wasn't worried that might change.
"In fact, I would say our working relationship is as close as ever - if not closer."
Lerner admits a general 'sell to buy' policy will remain in place and the likes of Curtis Davies, Luke Young, Nigel Reo-Coker, Steve Sidwell, Nicky Shorey and Habib Beye will be available to leave if the price is right.
But that will not stop the owner of NFL side the Cleveland Browns making funds available to O'Neill over and above that policy.
Lerner said: "I gave Martin the assurance that I also wanted to take the team forward. A £30 million striker would be out of our budget but there is money there to be spent on the team.
"I say that carefully in the context of knowing that the summer brings a very dynamic environment of players coming and going so I'm careful not to simply say 'here is a brand new amount of money, go and spend it.
"I would prefer to say our ambitions remain to get better and we are not in some sort of mode where we are shutting the door on spending on players.
"Is there a sell to buy policy? I think there is a sell to buy policy in every organisation on the planet.
"On the other hand if an opportunity arises and the net 'sell to buy' doesn't equal what is required to take advantage of an opportunity, then you may spend the money. I wouldn't exclude us from the group who would do that."
Lerner is confident that Villa will be able to retain the services of midfielder James Milner who is due to have further talks over a new contract during the summer.
Milner, the PFA Young Player Of The Year, has been linked with a possible move to Manchester United.
Lerner said: "I am not worried about losing James Milner and I think he will play for Aston Villa.
"I'm not dismissive of the realities of the situation whereby a player who has received the attention and acclaim of James Milner is going to spark discussion and debate about whether or not he will move.
"But I don't worry about him leaving because he is wanted at this club. We will do everything in our power to keep him."
Lerner also underlined his own commitment to remaining at Villa who have enjoyed three successive top six finishes in the Barclays Premier League and a Carling Cup final appearance this season.
He said: "I remain very excited and privileged to be involved at Aston Villa. It's been a great four years so far. Next year will be exciting and worthwhile and I look forward to it."