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Despite the Premier League club previously announcing the deal, Gueye has stressed he won't be joining the club after suspect negotiations.
"I wanted to speak out against the circumstances surrounding the signature of a contract with Watford and what I consider to be irregularities with their representatives," he said.
"After numerous discussions, I conclude that there has not been any considerable administrative action taken to resolve my case. As a result, and in consideration of the fact that the contract has not yet taken hold, I announce the end of all contractual links to Watford.”
Gueye has however confirmed he won't be playing for Le Havre next season with his future now up in the air.
The 22-year-old joined last summer and initially struggled for game time. However, the Nigerian has experienced something of a resurgence since theBundesligaresumed, playing every game and scoring in the 2-2 draw at Koln, his first for the club and of the season.
He has also completed 90 minutes in Mainz's last two league outings, the most recent a shock 2-0 win atEintracht Frankfurt.
The young England star could reunite with Pep Guardiola
Sancho left City for Dortmund in 2017 after initially moving to the Etihad from Watford in 2015.
The 19-year-old, who was previously part of Real Madrid's academy, will undergo fitness tests with Nice on Monday ahead of the deal being completed.
Mourinho wants to add the Brazilian to his backline
Silva will be a free agent at season's end with Jose Mourinho eager to bolster his defensive stocks with the Brazilian veteran.
Fellow Premier League sides Arsenal and Everton are also interested in landing the defender, whose wages may be stumbling block for Spurs.