Watmore has signed a two-and-a-half-year contract with Middlesbrough.
The 26-year-old has scored five goals in eight games since joining the club on a short-term deal in November.
Watmore has turned down more lucrative offers to sign for Boro. Sam Allardyce at West Brom had shown strong interest in the player and Watmore had multiple Championship offers on the table too.
His five goals in December saw him nominated for Sky Bet Championship Player of the Month.