Okoye, 22, will make a complete switch in January but will return to Rotterdam for the rest of the 2021-22 season.
He has established himself in Hendrikus Fraser's team since he joined the club from German club Fortuna Dusseldorf on a free transfer in July 2020.
Okoye was honoured as 2020-21 Sparta Rotterdam's Player of the Season after his impressive debut campaign and he has already played every minute of their league games so far this season.
Although he kept his first clean sheet in the Eredivisie this term on Saturday (3-0 win over Willem II), Okoye's Sparta Rotterdam are struggling for form as they occupy the 16th spot in the table with 10 points after 12 games.
Watford already boast a host of African stars including Nigeria’s William Troost-Ekong, Emmanuel Dennis and Oghenekaro Etebo alongside Senegal’s Ismaila Sarr, Morocco’s Adam Masina and Cameroon's Nicolas N'Koulou.
“Watford FC is pleased to announce that it has reached an agreement to sign highly-rated young goalkeeper Maduka Okoye, on a five-and-a-half-year deal that will begin on January 1, 2022,” read a statement on the club’s website.
“The Nigeria international joins the Hornets for an undisclosed fee from Eredivisie outfit Sparta Rotterdam, to where he will return on loan until the end of the 2021/22 campaign.
“A regular starter for the Dutch club, Okoye has lined up between the sticks in each of their games so far this season, while he has made 13 appearances for his country since debuting in a 1-1 draw with Brazil in 2019.
“The 6ft 6in shot-stopper’s consistent displays for both club and country have seen him linked with some of Europe’s biggest clubs, but he has now put pen to paper on a long-term deal with the Golden Boys.
With a transfer to one of Europe's top leagues, Okoye will gain more recognition and could receive a call-up to Nigeria national team.
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