The 22-year-old Algerian has penned a four-year contract, with the Cottagers making an initial payment of £3million with a further £1million based on appearances and divisional status.
"I'm really pleased to have joined Fulham," Bouazza told the club's official website.
"It's been a long wait and I'm just happy to be here today and I'm looking forward to getting out on the training pitch this afternoon.
"I've got a few days training to settle in and hopefully I'll be involved on Sunday against Arsenal.
"It's going to be a big game and we've got to make sure we do our jobs out on the pitch and make a good start to the season."
Cottagers chief Lawrie Sanchez was delighted to have got his man, adding: "Hameur is an exciting young player with a great deal of potential.
"His attributes as a player fit in with my philosophy to play attacking, exciting football next season.
"He will provide further pace and attacking guile to our frontline and I'm delighted that he has signed for the club.
"We are only a few days away from our first game of the season at the Emirates and I am confident that we have a group of players that will do well in the Premiership this season."
The French-born Algerian international is a product of the club's academy system and Hornets manager Adrian Boothroyd warned Fulham he is not yet the finished article.
"We're disappointed to lose Hameur because I wanted to keep him in the squad for this season," Boothroyd told the club's official website.
"Sometimes though you have to weigh up the money on offer and the value a player brings to the squad who wouldn't necessarily be starting each and every week.
"He is definitely a terrific player in my eyes but has got an awful long way to go to be all he can be in his career."
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