The teenager previously played for West Brom.
The 19-year-old is now set to join the Vicarage Road club from the summer.
Sinclair is from Birmingham and the teenager left former club West Brom to join Liverpool in 2011.
However, despite the lure of a return to his hometown, it seems Sinclair decided Watford was the best destination for his future development.
it would be easy to see why.
Aston Villa are currently at the foot of the Premier League table and look destined to be playing in the second tier from next term.
Watford however look safe after a solid first season back in the Premier League and are also in the FA Cup semi-finals - therefore looking a more attractive proposition.