Watford have exercised an option to sign Tom Cleverley for an undisclosed fee on a five-year contract from July 1.
The English midfielder moved to Vicarage Road for the second time on a loan agreement from Everton in January, and has made eight appearances to add to his tally of 11 goals in 33 games during the 2009-10 Championship season.
Cleverley said: "I'm delighted. I think I made it clear I had feelings for the club when I came down here on loan and it was always the view to sign a permanent deal, so I'm over the moon.
Watford chief executive Scott Duxbury said: "We're very pleased to secure Tom's signature. I believe it's a sign of our ambition to recruit the highest calibre of player for Watford.
"Tom's affinity with the club and supporters has been very clear from the moment he returned, and we now look forward to seeing him in a Watford shirt for many years to come."
Cleverley won the club's player of the year award in 2010 despite seeing his season curtailed by a knee ligament injury in April of that year.
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