The Tricky Trees are interested in taking on the striker this summer as they look to add to their attacking options.
There were other Premier League clubs linked with the Nigerian star, but it is Nottingham Forest who have made the effort recently to sign him.
They have submitted an offer to Watford and now the deal has been done, according to Belgian daily Het Laatste Nieuws.
Nottingham Forest have pushed the deal over the line and Dennis will now be a Reds player.
Belgian club Club Brugge will also benefit from the sale as they had a 10 per cent resale clause inserted in the deal when Watford signed him last summer.
West Ham United gave up on pursuing the striker due to manager David Moyes, while links with Aston Villa have been played down.
Dennis scored ten goals and assisted six times last season in the Premier League and Nottingham Forest will be hoping he continues his form this season in the top flight as well.