The Portuguese manager will be the eighth since the Pozzo family took over the Hornets back in 2012, and their ninth in the last five years.
Silva took over at Hull in January, after the Tigers sacked Mike Phelan, but he couldn’t steer them away from danger as they were relegated to the Sky Bet Championship – along with Sunderland and Middlesbrough.
Watford delighted with Silva appointment
Silva has been linked with several managerial positions across Europe, including the Porto and Crystal Palace positions, but the Hornets have acted swiftly to make him their new head coach.
The 39-year-old has previously managed Estoril, Sporting Lisbon and Olympiakos, and Watford chairman Scott Duxbury said Silva was "one of the most sought-after head coaches in the Premier League."
He said: "His pedigree and promise speaks for itself with his achievements in top divisions elsewhere across Europe, as well as his work at Hull City last season."
Duxbury stated that the Hornets are “delighted” to have secured a head coach of his “profile and potential”.
“It's an exciting time to be a Watford fan,” Duxbury added. “I'm sure all supporters will join me in offering Marco and his family the warmest of welcomes to Vicarage Road."
Hornets move quickly after Mazzarri departure
Walter Mazzarri left Watford earlier this month and after a run of 10 defeats in 14 games, they slumped and finished the season one place above the relegation zone.
The Italian was only in charge at Vicarage Road for less than a year, and the club’s hierarchy have acted swiftly since his departure.
The search for the right candidate is over, and after a mixed bag of managers in recent years, the Hornets will now look to push on next season after their 17th-placed finish in the 2016-17 season.
Silva won eight of his 22 matches with Hull in the second half of the season, and will now be taking on a new challenge at Vicarage Road.