Gerard Deulofeu has signed for Watford for an initial £11.5m fee on a five-year deal from Barcelona.
Barcelona could earn a further £3.5m in add-ons and will also receive a percentage of any future transfer to other clubs.
Deulofeu played seven games and scored one goal for Watford on loan last season.
"We are very pleased to welcome Gerard back to Vicarage Road and thank FC Barcelona for their part in concluding this deal," said Watford chairman and chief executive Scott Duxbury.
"Our ambition to succeed and grow in the Premier League remains as strong as ever."
Deulofeu was a graduate of Barcelona's La Masia academy but joined Everton on a permanent deal in 2015 following a successful loan spell.
He returned to the Nou Camp just two years later though when Barcelona exercised their buy-back clause in the deal.