The former Norwich and West Ham defender, who has been on the coaching staff at Vicarage Road since retiring last year and had a stint as caretaker after Adrian Boothroyd's departure, is expected to be officially named Hornets manager on Monday.
"I can bring an honesty and an integrity to Watford," Mackay, who replaces Brendan Rodgers following his switch to Reading, told Sky Sports News.
"I know the club inside out and I've been in the Championship for 10 years now and know everything about it.
"I know how the players at the club tick. I was caretaker manager about six months ago so I feel I can bring a fresh approach.
"I've been working towards this for the last six years and am looking forward to the challenge."