Indeed, 'BBC Sport' goes as far as to say that the bid for the 26-year-old has been accepted.
Sean Dyche's side had turned down two previous offers from Watford so far this summer and insisted that they wanted to keep the player, but with Gray having entered the last year of his contract and with talks having hit an impasse over a new deal, it is thought that the latest offer on the table was too good to turn down.
Nevertheless, £18.5m will mean the Clarets have more than doubled their money after signing the player from Brentford in 2015 for £9m.
Gray scored nine Premier League goals last season as Burnley successful fought off relegation to finish 16th, though his season did not go completely to plan, the former Luton Town man was banned for four games over homophobic tweets sent in 2012.
English publication 'The Daily Mail' reports that Gray's move to Heartfordshire will see his wages rise to around £70,000 per week.