Manager Remi Garde said the 20-year-old was "not professional" after he was pictured partying last weekend after Villa's 4-0 Barclays Premier League defeat to Everton
Grealish has since been training with the Villa under-21 side and will continue to do so, Garde said at a Thursday morning press conference.
"He won't be included in the squad for Watford," said Garde.
"(His actions) are not of the professional standard that I expect from my players
That is why Jack is training in the under-21 team."
''Sometimes, players in every country ask to stay in the city where we are playing
It is not a problem for me, it can happen once or twice during a season.
''The problem for me was not him not being on the bus.
''He is not playing at the weekend and at this stage, I think that is enough.
''Jack has got a lot of ability but he needs to improve his game and work at it.''
This is not the first time that Grealish has breached club discipline
The youngster was pictured earlier this year laid on his back in the street during a holiday in Tenerife, for which he was reprimanded by Aston Villa.
He has also been pictured partying in Marbella and seen inhaling nitrous oxide, known as laughing gas or 'hippy crack', from a balloon in a photograph taken last year.
Source : PA