The playmaker, signed from Manchester City in August as part of the £24m deal that saw James Milner arrive at Eastlands, has told Villa boss Houllier that he wants to go.
The Frenchman is willing to listen to offers for the midfielder, who has failed to settle in the Midlands following his switch.
You can go: Stephen Ireland has been told he can leave Aston Villa
Houllier has left the door open for Ireland but he is not part of Villa's plans ahead of today's trip to Wigan.
'Stephen has told his agent that he wants to go in January,' said Houllier.
'I'm not convinced about that. But once a player says he wants to go, he can go.'
Asked whether the club would be seeking its' money back, the Villa boss added: 'I would think so.'
It is a sad end to a situation that was meant to benefit both parties.
Cheerio: Houllier has failed to take a shine to Ireland
Ireland, who has been linked with a move to Celtic, had fallen from favour under the new Arab regime at City and Villa were in desperate need of a skilful operator to replace Milner.
Houllier effectively completed a U-turn after accepting that Ireland wanted out. Immediately after the derby against Birmingham City six weeks ago, he suggested that the 24-year-old was not working hard enough.
On Friday, Houllier hinted the player's heart was never in it. With money tight in the Barclays Premier League it seems almost certain that Villa will have to take a lower cash offer.
Moreover, Ireland's £65,000-a-week wages will be sufficient to frighten off all those without deep pockets - even if they try to arrange a loan deal.
'I've told Stephen he is a member of my squad and that I expect him to be performing a bit more,' added Houllier.
'I haven't said anything wrong about him. But I think there is a discrepancy between what I see in training and what I see in a game. I told his agent that was the only problem.
'He has got to sort that out. I like the man, the player. He's got some skill, touch, an eye for a pass. But he has got to adapt to modern football as well.
Moving on: Celtic are in the running to take Ireland away from Villa Park
'He does not live in Birmingham and hasn't moved house. I am quite patient but it has been a huge shock for him coming from Manchester City.
'At the moment, he is not in the squad and will not be travelling to Wigan. It's a football decision. Nothing else.'
Houllier also left out Villa captain Richard Dunne for the second week running after an alleged training ground bust-up with coach Gary McAllister.
Celtic close in on six-month loan deal to sign Villa midfielder IrelandAston Villa boost as forgotten man Delph nears full fitnessFrom Villarreal to Villa... Houllier eyes prolific Spanish teen sensation GuilleASTON VILLA FC
Source: Daily Mail
Source: Daily Mail