The Hornets , according to thesun.co.uk are expected to sign the midfielder on loan with option of a permanent deal at the end of the 2021/22 season.
Etebo spent last season on loan at Turkish Super Lig club Galatasaray and has no future at Stoke City.
He made 24 league appearances for Galatasaray last season.
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Watford are keen to bolster their midfield and the Nigeria international will surely be a good addition to the squad.
The 25-year-old joined Stoke City from Portuguese outfit CD Feirense in 2018.
The combative midfielder scored two goals in 45 appearances for the Potters.
The London club already have four Nigerians; William Troost-Ekong, Isaac Success, Tom Dele-Bashiru and Emmanuel Dennis in their squad.
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