Birmingham City have signed midfielder Diego Fabbrini from Watford for £1.5m on a three-and-a-half-year deal.
Fabbrini, 25, has been on loan at Championship leaders Middlesbrough, for whom he scored six times in 24 matches.
The Italian spent two months with Birmingham last season, playing five league games, since when boss Gary Rowett has been keen to arrange a more permanent deal.
He is now contracted to the club until the summer of 2019.
Fabbrini, who has one cap for Italy, began his career in his home country with Empoli and Udinese before coming to England to join Watford in 2013.
He is Birmingham's third signing of the January window following Sunderland winger Will Buckley, on an initial month's loan, and teenage midfielder Luke Maxwell, 18, from Kidderminster Harriers for £75,000.
Meanwhile, the club have cancelled the contract of defender Shane Lowry, 26, by mutual consent and he has joined Perth Glory in his native Australia.
Blues remain up for sale, but had their bank balance boosted earlier this month by the sale of Demarai Gray, who joined Premier League side Leicester City for £3.75m.
After a run of 13 points out of a possible 15 since Boxing Day, Rowett's side are seventh in the league, below the play-off places on goal difference.
Find all the latest football transfers on our dedicated page.