Blackpool defender Craig Cathcart will sign for the Hornets in the next couple of days, the Watford Observer understands.
The Golden Boys have been in talks with Cathcart for more than a week but were considering other options over the weekend.
However, we understand Watford have opted to sign their former loanee, whose Blackpool contract expires later this month.
Cathcart will join up with the rest of the Watford squad on their pre-season trip to Italy in the coming days.
The 25-year-old central defender, who can also play at right-back, made 12 appearances for the Golden Boys under Malky Mackay during a loan spell in 2009 before it was ended prematurely, with the club claiming it was due to a knee injury.
He went on to sign with Blackpool the following summer, soon after their promotion to the Premier League, for a reported £350,000 and went on to make 117 appearances for the club during a four-year stay.
The former Manchester United defender’s medical will show he has an enlarged heart which has to be monitored regularly and resulted in him missing the first leg of Blackpool's Championship play-off semi-final first leg in 2012 as a precaution.