The Hornets have this evening confirmed they were keen to avoid commercialisation of the new stand so the prospect of a sponsor being included in the title was said to be 'very unlikely'.
The Golden Boys said they announced the changes today because they were planning for next season.
Watford confirmed former owner Laurence Bassini’s claims the East Stand would be named after Taylor, shortly before the Stanmore businessman left the Golden Boys, was a contributing factor in the club deciding to rename the Rous Stand, and not the new East Stand, after the Hornets legend.
The Golden Boys did state they had been considering renaming the Rous Stand after someone immersed in the club’s on-field achievements for some time. They added Sir Stanley Rous’ alleged support of apartheid was another factor in the decision to rename the structure.
The Hornets will hold an official renaming ceremony towards the start of the next campaign, with other associated items around the ground to be changed throughout the close-season.
Hornets chief executive Scott Duxbury told the club’s website: "It’s always been our intention to honour one of the club’s greatest servants and renaming the Rous Stand is hugely appropriate.
"We intend to permanently reserve two seats, for Graham and his wife Rita, within the directors’ seating area in a stand which already contains The Sir Elton John Suite. Both men are synonymous with a special time in the club’s history, so we feel this is a fitting tribute."
On the East Stand, Duxbury told the Watford Observer: "We feel the name aptly reflects the club’s core beliefs and its wish to strive to remain a key part of local community life.
"As The Graham Taylor Stand name comes into being for next season, it is highly appropriate that opposite it will be a stand name reflecting the values he instilled at the very heart of Watford Football Club."
Taylor first became Watford manager in 1977 and famously led the club to the old first division with three promotions in the space of five years.
The Hornets finished runners-up in their first season in the top-flight to qualify for Europe and reached their only FA Cup final to date in 1984.
The Hornets boss left to join Aston Villa in 1987 but after becoming England manager and then taking over at Wolves, he returned to Watford in 1996.
Taylor was unable to stop the Hornets from being relegated to the third tier but after a year as general manager, he again assumed the hot seat and guided the club to back-to-back promotions, with their elevation to the Premier League achieved via play-off glory at Wembley.
Taylor said: "I feel truly honoured that Watford would seek to recognise my time at the club in this way. As everybody is very well aware, I spent a big part of my working life at the club and as part of the town and its community."
He added: "It will certainly feel strange coming to future Watford home matches and sitting in a stand named after myself, although it’s something that myself and my family can take immense pride in. So I would [like to] thank everyone at the club most sincerely for this wonderful gesture."