The 28-year-old has been strongly linked with a move to the Premier League club over the last week and the Hornets have now announced the move on their official website.
Suarez, who only joined Fiorentina from Atletico Madrid in the summer, has three international caps for Spain, the last of which came against Netherlands in March.
"Watford is delighted to confirm the signature of Spanish international midfielder Mario Suarez. The 28-year-old has signed a four-and-a-half-year deal with the Hornets and joins from Italian Serie A side Fiorentina for an undisclosed fee," read a statement on the club's website.
Watford booked their spot in the fifth round of the FA Cup on Saturday afternoon with a 1-0 win at Nottingham Forest.