The 6ft 8in goalkeeper has joined Deportivo on a temporary basis after failing to nail down a regular first-team place at Vicarage Road.
The Romania international made just two senior appearances for the Hertfordshire side after joining from Sunderland in January 2016.
Heurelho Gomes is the preferred choice in goal at Watford and the deadline day arrival of Orestis Karzenis on loan from Udinese further limited first-team opportunities for Pantilimon.
Karnezis is currently on international duty with Greece but will join up with his new team-mates on his return after agreeing a one-year loan deal with Marco Silva's side.