The 26-year-old has penned a four-year contract with the Barclays Premier League new boys, and is now set to join up with the Hornets for pre-season training.
Capoue made 24 league appearances for Spurs after arriving at White Hart Lane in 2013 from French side Toulouse.
Capoue struggled to hold down a regular starting spot and is out of favour with Tottenham manager Mauricio Pochettino. He was linked with a move away in the January transfer window but potential reported deals fell through.
The midfielder made almost 200 first-team appearances for Toulouse after progressing through the youth ranks at the French club, and was nominated for Ligue 1's young player of the year award in 2013.
Capoue has featured seven times for his country since being handed a senior international debut in a friendly against Uruguay in August 2012. He has scored once for Les Bleus, in a 3-1 World Cup qualifying win over Belarus.
The promoted side have also been heavily linked with a move for another Frenchman from Spurs - Benjamin Stambouli - but so far there has been no update on apparent negotiations. The 24-year-old defensive midfielder joined the north London club from Montpellier last September.
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