The Toffees have agreed a fee in the region of £35m for the Brazilian with add-ons potentially taking the final fee towards a club record £50m.
The young forward is due for a medical at Finch Farm on Monday where he is also expected to put the finishing touches on a five-year contract.
The deal would represent a significant profit for Watford who paid £11.5m for Richarlison from Fluminense just 12 months ago.
The Mirror reports that the fee also includes an extra payment as part of a “peace deal” between the clubs to end a dispute stretching back to October.
Back in the autumn Watford were furious at Everton for their continued pursuit of Silva despite the Hornets repeatedly rejecting their advances.
Everton were eventually warned off but Watford dramatically lost form and Silva - who wanted to move to Goodison Park - was sacked in January.
Despite his dismissal Watford remained angry with Everton and made an official complaint to the Premier League.
When Silva was eventually appointed Everton manager in June Watford felt it merely strengthened their case.
The Premier League are reluctant to get involved in such disputes, preferring the clubs to sort any issues out themselves.
However, with talks reaching an impasse a threat of a tribunal and Everton being ordered to pay compensation became very real.
As a result Watford were reluctant to negotiate any further deals with Everton, despite Silva’s interest in Richarlison.
Now it seems the deal for the 21-year-old is being used to smooth things over and allow everyone move on.
It certainly explains why Everton are ready to spend such a humongous fee on a player who, for all his talents, is still young and inexperienced.
There were plenty of people on social media speculating that the deal was linked to the dispute to been the two clubs so this report is no real surprise and to be honest comes as something of a relief.
In effect this is two transfer deals in one, with Richarlison valued at £35m and Silva £15m, fees that seem much more realistic, even in today’s inflated market.