Defeat to Leicester City on Saturday leaves the club just five points clear of the relegation zone, despite sitting 10th in the table, but after a run of one win in 11 matches, the Hornets have taken action.
And in their announcement, Watford have blamed the approach from Evertoin earlier in the campaign for their downturn in fortunes.
A statement from the club read: "This has been a difficult decision and one not taken lightly. The club is convinced the appointment of Silva was the right one and had it not been for the unwarranted approach by a Premier League rival for his services we would have continued to prosper under his leadership.