The highly-rated 19-year-old, who debuted for the Socceroos last June, made the move for an undisclosed transfer fee.
"Nestory can be a very special player and we believe he can realise his potential here, with us," said Watford sporting director Gian Luca Nani.
"Nestory was in high demand, and thanks to our well-established scouting network and connections, we were able to get ahead of others in the competition to sign players of this caliber."
Irankunda made his professional debut at the age of 15 for Adelaide United during the 2021/22 season and gained recognition with a standout performance for an A-League select team against Barcelona.
Born in Tanzania to parents from Burundi who relocated to Australia when he was three months old, Irankunda opted to represent Australia internationally and received his first cap from former coach Graham Arnold in June 2024.
He netted his first goal for the national team later that month against Palestine in his second match for the Socceroos before completing a transfer to Bayern Munich in a record A-League deal.
He made his fifth appearance for Australia in a 3-1 victory over China in October of last year during Asia's World Cup qualifiers but has not been called up since by current coach Tony Popovic.
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