The Cameroon international defender has arrived from Udinese after spending several seasons on loan at Granada.
Making good use of the Pozzo family connections once more, the Hornets have signed the 27-year-old after what was a six-year spell on loan at Granada, another member of the series of clubs owned by the Watford chairman.
Watford FC (@WatfordFC) July 14, 2015
Nyom is the second arrival from Udinese since the end of the season, with the Hornets also recruiting Matej Vydra on a permanent deal after two separate years on loan at Vicarage Road.
It is the seventh signing of an international player by the club, and marks another position in the squad strengthened ahead of Watford's return to the Premier League after a eight-year gap.
The right back played 38 times for the La Liga side last year, while he also has 11 caps for Cameroon.
Below are some of the comments that ended up on Twitter commenting on the deal:
Allan Nyom is the much needed Right Back we've needed, wouldn't be surprised to see Paredes leave this summer now #Watfordfc— Ben Aiton (@benaiton23) July 14, 2015