The 23-year-old has signed a five-year deal to end his spell with Italian club Udinese after impressing during two loan spells at Vicarage Road.
A statement on the club's official website read: "Watford Football Club is delighted to announce that Matej Vydra has signed a five-year contract with the Hornets.
"Having penned a permanent deal, the 23-year-old is beginning preparations for the 2015-16 Premier League season with the rest of his Hornets team-mates at UCL London Colney."
Vydra scored 16 goals in 31 Sky Bet Championship starts last season, adding to his reputation in Hertfordshire having managed 22 for the club during the 2012-13 campaign.
He had a spell in the English top flight with West Brom - again on loan from Udinese - during the following season, but 16 of his 23 league appearances, in which he scored three times, came from the bench.
Source : PA
Source: PA