The arrival of Martin O'Neill as the new Aston Villa manager provides the most telling indication that Randy Lerner, the charismatic American billionaire, is set to assume control of the club.

O'Neill was last night installed as the successor to David O'Leary, who left the club by mutual consent on July 19, and will fly to Germany today to join the Villa players on a three-match pre-season tour.

Doug Ellis, the Villa chairman, is believed to be close to selling his 38 per cent stake in the club to Lerner and both men agreed that O'Neill, who led Celtic to the final of the Uefa Cup in 2003, would be an appropriate and popular choice as the new manager.

Ellis was unable to discuss Lerner's interest - London Stock Exchange rules preclude such discourse in advance of any takeover - but he did not want uncertainty off the field to affect the team's chances on the field.

Villa begin their Premiership season away to Arsenal on August 19.

I understand, however, that Lerner will win the right to acquire Ellis's shares, effectively giving him control of the club, and that O'Neill is happy with that scenario. O'Neill was welcomed to Villa Park last night by about 1,000 supporters. Not since Ron Atkinson's arrival in 1991 has the appointment of a Villa manager created such excitement.

O'Neill had previously been interviewed to replace Sven- Goran Eriksson as England head coach. Aged 54, he made his name as a stable midfield player with Nottingham Forest in the Seventies.

He studied law and was described by Chris Nicholl, the former Aston Villa captain, as being "too clever to be a footballer".

O'Neill, appearing overwhelmed during the press conference to confirm his appointment, said: "I'm nervous... absolutely petrified.

"It is a fantastic challenge and I am willing and ready to go. I have got a lot of enthusiasm. On its own it gets you little but it keeps you going.

"I wasn't sure if anyone would be outside and I'm rather taken aback to be perfectly honest. When Mr Ellis gave me the chance to manage the team I wanted to do it.

"I think everyone is well aware of the history of this club. Trying to restore it to those former days of fantastic glory seem a long way away - but, well, why not try?

"It is nearly 25 years since they won the European Cup [in 1982]. They're a long way from that this minute but that's the dream."

Ellis, who first became chairman of Villa in 1968, referred to O'Neill as "the biggest signing for Aston Villa". Quite how long the men will have to work together remains to be seen.

"To me, Martin's passion and ability to motivate players is unsurpassed," Ellis said. "We had three meetings at my home and I've not spoken to anyone else."

Lerner faces competition from the group fronted by Athole Still, the sports agent, plus the consortia of Michael Neville and Nicolas Padfield QC, both of whom are contemplating joining forces.

Rumours are rife that, if Neville is successful, he will try to appoint Graham Taylor, the former Villa manager, as the new club chairman.

Lerner is set to make a bid next week for Villa. Lerner recently spent a week with Villa and, crucially, two successive evenings in the company of O'Neill.

I understand they each impressed the other.