According to several outlets including the Daily Mail, the Hornets are in discussions over a £3.3m ($4.4m) deal for the 18-year-old custodian, whom they are keen to bring to Vicarage Road during the forthcoming January transfer window.
Both Arsenal and Everton are said to have been scouting Dahlberg for some time, along with Spurs. Serie A title contenders Napoli and Bundesliga outfit RB Leipzig have also been linked with a move for his services over recent weeks.
Paris Saint-Germain, Bayer Leverkusen, Schalke 04 and even Championship strugglers Sunderland were among the other clubs previously rumoured to be monitoring his progress.
Dahlberg, reported by the Watford Observer to have been at the Hornets' London Colney training ground on Tuesday (5 December) in order to finalise discussions, joined Gothenburg from Alvangens IK in 2015 and has already established himself as the Allsvenskan's club first-choice goalkeeper. He made 34 total appearances last season that included a Europa League first-round qualifier against Welsh side Llandudno.
The Swedish youth international could be viewed as the long-term successor to current Watford number one Heurelho Gomes, now 36 and out of contract in the summer of 2019.
The veteran Brazilian has been backed up by Udinese loanee Orestis Karnezis since the respective summer departures of Costel Pantilimon and Giedrius Arlauskis. The experienced Greek conceded three goals on a nightmare Premier League debut off the bench at Everton last month.
Austria Under-21 international Daniel Bachmann was also signed from Stoke City in July, although has yet to make a single competitive appearance under head coach Marco Silva.
Nathan Gartside currently keeps goal for Watford's Under-23 side, assisted by young Jamie Lacy with Sam Howes currently on loan in the National League South with Hampton & Richmond Borough.
Speaking in September, agent Per Jonsson confirmed there were a number of clubs tracking Dahlberg and stated his belief that the teenager would become the most expensive goalkeeper ever to hail from Sweden.
Such a list includes the likes of Magnus Hedman, Andreas Isaksson and Thomas Ravelli.
"There is a lot of interest in Pontus," he was quoted as saying by football.london. "But on the day he is sold, he will of course be Sweden's most expensive goalkeeper business ever. I can say that."