The Hornets are currently bottom of the Premier League after losing three and drawing one of their opening four fixtures.
Flores previously spent a year in charge of Watford during the 2015-16 season but left the club at the end of that season despite finishing mid-table.
The sacking of Gracia has come as a surprise with the Premier League season just four games old and given Watford’s efforts last term.
Gracia led the club to an 11th placed finish, while they also reached the FA Cup final, which they lost 5-0 to Manchester City.
September 7, 2019.