A deal to sign the 20-year-old was concluded this week, after he underwent a medical at the club's training ground on Wednesday, and he is available for selection to face Charlton tomorrow.
Alleyne adds to Watford's centre-back options, an area of the squad that had looked thin with the senior options consisting of just Mattie Pollock, James Abankwah and Kevin Keben.
It is understood the Hornets are close to further reinforcing that area of the pitch, as well as signing a holding midfielder.
Max Alleyne joins from Manchester CityMax Alleyne joins from Manchester City (Image: Alan Cozzi/Watford FC) Paulo Pezzolano said of his new addition: "Max stands out for his technical ability.
"He’s a very dynamic player and with a really good understanding of the game. He's a very versatile player. Being ambidextrous, he can play on both sides of the field.
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"In addition, even though his main position on the field is as a centre back, he can also play in other positions.
"Seeing Max play, it is clear that the Man City academy is doing a great job. Now it’s our job to contribute to Max’s development, help him settle in the professional game and get the best out of him for Watford."
Max Alleyne poses in his Watford kitMax Alleyne poses in his Watford kit (Image: Alan Cozzi/Watford FC) Alleyne becomes Watford's tenth summer signing after a busy summer of business both in and out at Vicarage Road.
The England youth international has only played senior matches for Manchester City B in the EFL Trophy but has been referred to as a "special talent" by boss Pep Guardiola in the past.
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City signed Alleyne from Southampton for a reported £1.5 million when he was just 15 years old and has previously been linked with a permanent move to Borussia Dortmund this summer prior to this temporary arrangement being agreed.
Alleyne is the son of former cricketer Mark Alleyne, who played for England between 1999-2000 and starred for Gloucestershire for 19 years.