Watford have agreed a £7m deal with Derby for exciting young midfielder Will Hughes, according to Sky sources.

It is understood the fee is an initial £4.5m, rising to £7m for the 22-year-old, who is currently with the England U21 squad at the European Championships.

Personal terms have been agreed in principle and the deal will go through subject to Hughes passing a medical.

Hughes made his debut for the Rams as a 16-year-old in 2011 and, despite losing eight months to injury during the 2015/16 campaign, he has made 165 Championship appearances for the club.

Hughes (centre) is a regular member of the England U21 side

And he is now poised to join Premier League Watford, as new Hornets boss Marco Silva looks to re-shape his squad for the 2017/18 season.

Hughes has been an unused substitute for both of England U21's opening two matches at the Euros and they will bid to advance to the next stage when they play hosts Poland on Thursday night.