The fee is reported to be €58.4m plus €2m in bonuses, a significant return for Villa on a player who has been a key figure since arriving from Brentford in 2020.
Watkins scored 16 goals and added three assists in 37 Premier League appearances last season and is under contract at Villa Park until the summer of 2028, meaning the club were under no pressure to sell before finding the right offer.
The England international is expected to travel to Saudi Arabia shortly to complete the move, joining a growing list of Premier League players to make the switch to the Saudi Pro League this summer.
Al-Hilal have pushed hard for Watkins in recent days, and personal terms are understood to have been resolved with relative ease given the scale of the financial package on offer.
His departure leaves Unai Emery needing to manage his attacking options carefully in the closing days of the window, though Aston Villa have already moved to soften the blow: the club agreed a package worth around £65m with Chelsea for striker Nicolas Jackson earlier this week, positioning him as Watkins's direct replacement.
Across 278 appearances in all competitions for Villa, Watkins scored 108 goals and provided 47 assists, establishing himself as one of the Premier League's most reliable frontline strikers and earning a regular place in the England squad along the way.
He recently fired Villa into European competition, and his exit marks the end of an era for a club that had built much of its attacking identity around him since his arrival for a then club-record £28m plus £5m in add-ons.
Despite Villa offering him a new contract through to 2030 in an attempt to keep him at Villa Park, Watkins had made clear his desire for a fresh challenge, turning down the approach in favour of the move to Riyadh.