The 22-year-old defender's season-long loan at Villa was cut short after he failed to play a single first-team game for the club.
Villa reportedly paid Liverpool a £1million fee to sign Ilori on deadline day on a season-long loan, with the option of making the deal permanent for around £6 million in the summer, but the former Portugal Under-21 international never managed a senior appearance for the club.
A nagging groin injury was partly to blame for the 22-year-old’s lack of playing time, but he still failed to break into Garde’s plans even after returning to full training in late-November.
The Telegraph suggested last month that Villa were looking to send the little-used centre-half back to Liverpool early in order to free up space in their squad for potential January signings, while more recent reports also claimed that the Reds were keen to recall him after seeing Dejan Lovren, Mamadou Sakho, Martin Skrtl and Kolo Toure all go down injured [h/t Sky Sports].
Speaking at his pre-match press conference, Garde confirmed that Ilori has now returned to Anfield, with the two sides believed to have reached a compromise over the £1 million loan fee, but stressed that it was his decision to terminate the deal due to the lack of opportunities the unsettled stopper would have received with the claret and blues going forward.
“He has gone back," the Frenchman said. "The player was not happy about his situation at this football club and not playing.
"When I arrived he was not totally fit, I don't know exactly what happened between August and the beginning of November. He was not always injured, but he trained with me.
"I have a lot of options in that part of the field, there was a lot of competition, and he was not happy not to play. But it was my decision and he's gone back to Liverpool."
Ilori, who was born in London to an English father and Portuguese mother, has still not made a competitive appearance for Liverpool since joining the club from Sporting Club de Portugal in September 2013, having been loaned out to Granada and Bordeaux in successive seasons before his short-lived Villa spell.
However, the recent spate of injuries on the club’s backline means the promising centre-back could make his long-awaited Reds debut on Friday night when Jurgen Klopp's men face Exeter City at St James Park in the third round of the FA Cup.