Watford’s Irish youth international becomes the club’s third signing inside two days following the recruitment of Liel Abada and Kyogo Furuhashi.
It is the second time the Hoops have utilised the cross-border market in as many weeks and a fee of £120,000 training compensation is expected for the Hornets’ academy player of the year.
Lawal has been compared to Everton midfielder Abdoulaye Doucoure by Troy Deeney but will take up a defensive role in the Colts team which begin their pilot season in the Lowland League at Bonnyrigg this weekend.
Watford had attempted to retain the highly-rated 18-year-old with a one-year deal plus further extension option, but the Irishman elected to move to the SPFL.
While the B-side are in action at New Dundas Park, the first team will face Preston in a pre-season friendly.