The 21-year-old Czech Republic international has agreed to join Steve Clarke's side on a one-year deal after impressing during a similar loan spell at Watford last term.
He picked up the Championship Player of the Year award after scoring 20 goals for the Hornets last season, and penned a contract to spend the upcoming campaign in the Premier League at the Hawthorns on Tuesday morning.
Baggies boss Clarke told the official club website: "I’m delighted to welcome Matej to the club.
"He had a really good year with Watford and we believe he’s got the qualities to score goals at a higher level. Hopefully, he’ll show that this year with us.
"We had Matej watched throughout last season. As well as some excellent scouting reports, we had some really good feedback from within Watford about Matej as both a player and person."Vydra will have to compete with Shane Long, Markus Rosenberg and fellow new signing Nicolas Anelka for a place in the West Brom's starting line-up.