Despite playing 32 games for the Hornets last season, the Watford hierarchy have reportedly decided to cash in on Pereyra, who is said to have originally had an asking price of £26m.
However, Watford have lowered their asking price following a lack of bids, reducing their demands to a more a reasonable £17m.
This drop in price has attracted Serie A clubs Torino and Napoli, with Napoli being the favourites to sign the 27-year-old.
Napoli are fearing a string of departures, with manager Maurizio Sarri expected to move to Chelsea by the start of next season.
Rumours suggest that Sarri will bring star winger Jose Callejon with him to Stamford Bridge. Napoli are hoping to use Pereyra to fill the gap of some of their upcoming departures.
It remains uncertain as to why the Hornets are so desperate to sell Pereyra, a player who seem to cement a place in the first team last season. He clearly a player with pedigree, playing for the likes of Juventus and River Plate, but perhaps Watford feel that the money would be of greater worth for them than the player himself.
Watford have already been busy in the transfer window. The Hornets have already signed former England international Ben Foster from relegated West Brom, as well as Ken Sema from Swedish club Ostersunds.