PA PhotosThe former England Under-21 stopper has passed a medical and agreed terms on a three-year deal at Portman Road, returning to the club where he started his career.
Loach, 24, appeared for Ipswich's Academy as a youngster before his family moved away from the area, later joining the youth systems at Nottingham Forest, Chesterfield and then Lincoln.
A move to Watford finally materialised in 2006, with Loach making more than 160 appearances in six years with the Hornets, including 32 last season.
But Ipswich boss Paul Jewell has made a keeper his number one priority this summer having used as many as four last term, with boyhood Town fan Loach arriving for a fee reported to be in region of between £150,000 and £200,000.
Watford, under new boss Gianfranco Zola, are eying a move for Carlo Cudicini or Manuel Almunia.
