Nosworthy has impressed while on loan at Watford this season and has now joined the club on a two-and-a-half year contract.
“It feels like home here,” Nosworthy told Watford’s official website.
“Credit to the manager here for the chance he gave me to play – and for helping make this deal happen.”
He added: “I’m also grateful to Sunderland for letting me get on with playing first-team football, which is what I need at this stage in my career.
“It’s a very professional set-up at Watford. Training is enjoyable and the whole club has impressed me.”
Watford manager Dyche said: “I think this an outstanding piece of business for our club, considering everything remains within the financial constraints we have here.
“Steve Bruce and Martin O’Neill have both been tremendously helpful towards this club, and that’s something we should all recognise while we reflect on this great development for our squad.”
