  The corrections induced by light quark masses to the current algebra result
for the $\pi^0$ lifetime are reexamined. We consider NNLO corrections and we
compute all the one-loop and the two-loop diagrams which contribute to the
decay amplitude at NNLO in the two-flavour chiral expansion. We show that the
result is renormalizable, as Weinberg consistency conditions are satisfied. We
find that chiral logarithms are present at this order unlike the case at NLO.
The result could be used in conjunction with lattice QCD simulations, the
feasibility of which was recently demonstrated. We discuss the matching between
the two-flavour and the three-flavour chiral expansions in the anomalous sector
at order one-loop and derive the relations between the coupling constants. A
modified chiral counting is proposed, in which $m_s$ counts as $O(p)$. We have
updated the various inputs needed and used this to make a phenomenological
prediction.
