That is according to Sky Sports, who report that Masina - also a target for Merseyside Blues Everton - has been agreed over by the two sides.
The Hornets have also agreed personal terms with the Italian left back, who should become their second defensive signing of the summer.
The English side signed Marc Navarro from Espanyol on a five-year deal earlier on, while Gerard Deulofeu has also made his stay at Vicarage Road permanent after spending last season there on loan.
Masina, meanwhile, has spent all of his career with Bologna - barring a loan move to Giacomense - kicking off as a youth player in 2001.
He is also part of the Italian Under-21 squad, but is yet to be called up to the senior side.