The left-back will become the Hornets' second defensive signing of the transfer window after the club brought in Marc Navarro from Espanyol.
The Italy U-21 international is reported to have already agreed personal terms with Watford, and will be hoped to sure up a defence that conceeded 64 goals last season, an amount only surpassed by West Ham and relegated Stoke City.
Masina was a regular at Bologna, making 119 appearances over 5 seasons as a professional, having risen through the ranks at the Italian club. He was also recognised for his performances in the 2014-15 season by being crowned Serie B's player of the year.