Garner, 19, is among United's most promising young players and heads to Vicarage Road in search of greater exposure to first-team football.
A technical midfielder who can play in deep-lying or advanced roles, Garner made his debut for the United senior side in February 2019 and featured six times, including three UEFA Europa League starts, last term.
Garner has long been earmarked as a potential first-team player for United, with boss Ole Gunnar Solskjaer speaking glowingly of him on several occasions.
A regular at various youth levels for England, including captaining its Under-17 side, Garner also skippered United's under-23s in 2020-2021 and was recently named its Player of the Year.
Although Watford – relegated to the EFL Championship in July – lost Abdoulaye Doucoure during pre-season, Garner joins a club stacked with experienced midfield options, including Etienne Capoue, Nathaniel Chalobah, Tom Cleverley, Will Hughes and Roberto Pereyra.