Watson scored three goals in 24 appearances for the Carolina Railhawks last season.
“Matt has consistently been one of the best players at the North American second division level over the past four years – three of which I had the pleasure of coaching him,” said Whitecaps FC head coach Martin Rennie.
“He has had several offers to join Major League Soccer teams, so I am really pleased that he has chosen to take the next step in his career with Vancouver Whitecaps FC.”
“I’m thrilled to be playing for Martin again, and now at the highest level of professional soccer in North America,” said Watson.
“Vancouver have a great fan base and an excellent organization. I can’t wait to get the season underway.”
