The 25-year-old has long been linked with a move away from the npower Championship outfit, with Newcastle and Wigan both thwarted in January moves for the centre-back.
Mariappa has now left Vicarage Road, though, and joined the Barclays Premier League new boys, who say they have paid "a significant fee" for his services.
"It's a great feeling to have signed," Mariappa told the club's official website, www.readingfc.co.uk.
"The Premier League is the best in the world, I'm delighted to have the opportunity to come here, try to work my way into the team and perform for Reading Football Club."
Mariappa becomes the Royals' fifth summer signing, following the additions of Pavel Pogrebnyak, Nicky Shorey, Danny Guthrie and Garath McCleary.
Reading manager Brian McDermott is pleased with his latest acquisition and backed the Jamaica international to shine at the Madejski Stadium.
"I'm delighted to get the deal to sign Aidy over the line, we have been chasing him all summer," he said.
"He's been a very important player for Watford over a number of years, he is well known to most of our players already and also the staff here. Every single person I have spoken to about him has nothing but good things to say about him both as a player and as a person."
The move is the first of Mariappa's career after making almost 250 appearances for Watford.
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