Ireland has been a fringe player at Villa Park, making his last appearance for the club back in January.
But he has been given the chance to resurrect his career as he becomes Stoke's second transfer deadline day signing, after Austria forward Marko Arnautovic arrived from Werder Bremen.
Ireland will now join up with Stoke boss Mark Hughes for the second time in his career after playing under him at Manchester City.
"Stephen is a player that Mark knows really well and, when the opportunity arose, he was keen to add him to his midfield and attacking options," chief executive Tony Scholes told Stoke's official website.
"Arguably the most successful period of Stephen's career to date was when he played for Mark at Manchester City and we hope that he can rediscover that form."
The Republic of Ireland international made more than 140 league appearances for City before joining Villa in August 2010 in a part-exchange deal that saw James Milner move to the Etihad Stadium.
Ireland has since made 45 Premier League appearances for Villa and was also loaned out to Newcastle for a brief spell in 2011.