The 28-year-old has signed a three-and-a-half year contract with the Premier League side.
Amrabat joins Watford for a fee of £6.1million.
“He has the qualities of the players we like,” said Hornets manager Quique Sanchez Flores.
“He can play at number 10; he holds the ball, he can turn quickly with the strength of a striker and escape the defensive line.”
— Watford FC (@WatfordFC) January 18, 2016