The 30-year-old has signed a three-year deal with the Hornets after he instigated the move by expressing his desire to move back closer to his home near Watford.
Kaboul’s age and injury record were factors in Sunderland’s decision to sell.
"I’m very happy and delighted to be a part of Watford Football Club, and I’m looking forward to the season," he toldwatfordfc.com.
"Just from outside, I can see it’s a family club, there are some good players here and I’m very confident.
"The club had a very good season last year, and we need to carry that on to be even better."
The French defender leaves Sunderland, where he made 23 appearances after joining from Tottenham Hotspur last summer.
Moyes said at his pre-match press conference today: "We've lost Younes but it was our choice as well.
"Younes had stated his keenness to go back to Watford, his home was there and he wanted to move back with his family.
"We have looked at it, he is 30-years-old and we have got the money back that we paid for him a year ago.