"Liam can give us a different kind of approach," Ward told the Gazette.
"He has 18 appearances off the bench in the Championship and he's scored some goals at reserve level. "The next stage for him is to develop and this move can help all three parties - Liam, Colchester United and Watford.
"Watford have an excellent youth policy and we're very grateful to (manager) Malky Mackay."
Source: PA