Cleverley steps up from his U18 coaching post to replace sacked manager Valerien Ismael.
Watford sit seven points clear of the Championship dropzone.
Advertisement
Advertisement
A statement said: The Hornets thank Valerien and his staff for their dedication and commitment, however the club's Board considers it an appropriate time to make a change in order to improve results.
Tom Cleverley's staff will be confirmed in due course."