Aston Villa manager Martin O'Neill has finally won the battle to sign Celtic midfielder Stilian Petrov who will be replaced in Glasgow by Real Madrid's Thomas Gravesen.

Petrov today moved to Villa Park for an initial fee of £6.5million but the add-ons could see the eventual figure rise to £8million.

The deal was followed shortly afterwards by news that Celtic have agreed to bring 30-year-old Danish international Gravesen to the club.

There have been no details on figures released by either club.

Former Celtic boss O'Neill made Petrov his number one target after replacing David O'Leary in the Villa hotseat nearly four weeks ago.

Portsmouth were also interested in signing Petrov but their manager Harry Redknapp conceded on Monday that Villa had won the race for his signature.

O'Neill was desperate to bolster his squad with a quality signing before the transfer window closes at midnight tomorrow and he told Villa's website today: "I've known him for quite some time and I think he is athletic, young and can also score some goals for us.

"I think his best years are ahead of him, at 27 years old. He's the right age but he's also got plenty of experience behind him.

"He's got that winning mentality from his years at Celtic but I think he had that anyway," he added.

Petrov should be in line to make his Villa debut against West Ham at Upton Park on September 10th.

Celtic had dug their heels in for the past few weeks and manager Gordon Strachan said recently the 27-year-old would not be allowed to leave, but agreement with Real and Gravesen softened the blow.

Gravesen joined Real from Everton last year but his opportunities for the coming season looked limited under new Real coach Fabio Capello.

"I am delighted to have joined Celtic, one of the biggest clubs in the world," Gravesen said in a statement this afternoon. "When I was made aware of Celtic's interest, naturally, I was very keen to talk to the club and now...I am very excited about this move.

"I am eager to get going and do all I can for Celtic. I look forward to meeting up with my new team mates next week."

Celtic manager Gordon Strachan said: "Thomas has shown great desire to play for Celtic and it is very clear that he is looking forward to joining the club. He is a player of great ability."

O'Neill is also believed to be interested in Barcelona striker Javier Saviola who is out of favour at the Nou Camp.