It should have been a 1-0 win to the visiting Blades after Oliver Norwood's deep free-kick was fumbled over the line by Villa goalkeeper Orjan Nyland.
But the usually reliable goal-line technology did not alert referee Michael Oliver that the ball had gone over the line. Even the Villa players knew it was a goal.
Villa had the better of the chances throughout the match, with Keinan Davis coming close twice and John McGinn almost firing in from the top of the box.
Dean Smith's side are still in 19th, one point from safety, while Sheffield United are four points off fourth-place.
Speaking after the game, United boss Chris Wilder wasn't happy with the technology blunder.
"I think the goalkeeper was in the Holte End when he caught it - or dragged it back. My issue is obviously one of frustration," the coach told reporters.
"Seven cameras haven't picked it up - the most technical league in the world - everything we see at every angle and it hasn't seen a goal. That is disappointing from our point of view.
"We went to Tottenham last year, John Lundstram's big toe was offside and I was hanging around at White Hart Lane in the pouring rain for 10 minutes waiting for a decision. I don't understand why I can't wait 10 minutes in Birmingham.
"The statement has come out and it is unprecedented, unbelievable. I did have a laugh and joke beforehand that we have had some poor decisions go against us and I said I wouldn't bet against one going against us this evening."
Hawk-Eye: Hold my beer... pic.twitter.com/6Cgt69vY8C
— Pete Raven (@PeteJRaven) June 17, 2020
No goal??? Hawk-Eye died today. #AVISHUpic.twitter.com/A0zlBVP1ay
— torvald taake (@two_strikes) June 17, 2020