Villa went on a mammoth spending spree in the summer, bringing in a number of players after winning promotion back to the Premier League, but Phillips is one player they did miss out on.
The 23-year-old had caught the eye of Villa boss Dean Smith as both clubs battled for promotion from the Championship last season, a battle that the Midlands outfit won via the play-offs.
However they had a bid, thought to be in the region of £15million, rejected by Leeds owner Andrea Radrizzani, who made it clear they had no intention of cashing in on their prized asset.
Villa were not the only club to have a bid knocked back.
Fellow Premier League outfit Burnley were also in the hunt, but again Leeds knocked back all offers.
There had been talk of Villa chancing their arm once again in January, but Leeds have now moved quickly to put an end to all the rumours once and for all.
Leeds have yet to announce the deal, but reports are rife suggesting that Phillips has agreed terms on a new improved five-year deal at Elland Road.
That news will be music to the ears of Leeds fans, who feared he could have been tempted away, but will be disappointing for the rest, including Villa.
Phillips has started all six of Leeds' games so far this season and will now be able to focus on helping them win promotion to the Premier League.
They have won four and currently sit in third place.
If Leeds miss out on promotion once again, the future of Phillips will be back in the spotlight, and maybe Villa have not given up all hope of doing a deal at some point in the future.