No financial details were given but British media put a 20 million pound (20.04 million pounds) figure on the transfer.
The 27-year-old scored 39 goals in 100 appearances in two and a half years at Vicarage Road, including 17 goals in Watford's first season back in the top flight after securing promotion in 2014/15.
That brought Ighalo, who originally joined Watford on loan in July 2014, a new five-year contract last August.
He has been off the boil this season, however, scoring just once in the Premier League. He has not scored in all competitions for 15 games.
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The Nigerian joins a list of top players joining the Chinese soccer gold rush, with Chelsea's Brazilian midfielder Oscar joining Shanghai SIPG this month for a reported 60 million euros. ($64.79 million).
(Reporting by Alan Baldwin, editing by Toby Davis)
