In a statement posted on the clubs website, the club stated that letting Silva go has been a “difficult decision” and “one not taken lightly.”
They added: “The club is convinced the appointment of Silva was the right one and had it not been for the unwarranted approach by a Premier League rival for his services we would have continued to prosper under his leadership."
Everton to blame?
To many, the Portuguese boss had already had his head turned by the allure of coaching the Goodison Park side and that had an impact on his side's fortunes.
Recent reports that aimed to analyse the downturn in Watford's form suggested that a number of players had also been distracted by possibly following Silva out of the club - both with him to Merseyside and others further afield.
That was reflected in the club statement.
The club stated: “The catalyst for this decision is that unwarranted approach, something which the board believes has seen a significant deterioration in both focus and results to the point where the long-term future of Watford FC has been jeopardised.
“For the security and success of the football club, the board believes it has to make a change.”
Spanish boss Javi Gracia is expected to be named as Silva's replacement in due course as the club look to appoint their 10th manager under the Pozzo family since their takeover in 2012.
The 47-year-old has managed a whole host of clubs during his 10 years in management including Almeria, Malaga, Osasuna and most recently, Rubin Kazan.
He departed Kazan before the start of this campaign following a ninth-place finish place in the Russian Premier League last term.