The 22-year old Nigerian winger had been trialing with ‘Gers and impressed in a bounce match during the week which was enough for Ally McCoist and Craig Whyte to get his signature for a two-year deal.
Aluko left Aberdeen at the end of last season and it appeared as though the Dons wanted around £200,000 in compensation which Rangers could not afford but the two clubs came to an agreement which gave the green light for a move to Ibrox.
A source close to Aluko told the Daily Record that Watford came in with a late offer but the ex-Birmingham City only wanted to join the reigning Scottish champions.
"Since the minute he arrived in Glasgow his heart has been set on making the most of this opportunity. He is desperate to prove he can make a difference to this Rangers side."