The 21-year-old, who joined Brentford B in June 2017, will link up with the Irish side ahead of their new season which kicks off next month.
Ali joins Waterford having scored 19 goals in 79 appearances for Brentford B. His last goals for the club came at the end of November when he helped the side to an impressive 3-1 win over AFC Wimbledon with Ali netting twice at Kingsmeadow.
Ali joined Brentford having come through the ranks at Dundee United where he played a handful of matches before having a short loan with East Fife.
On his departure, Brentford B Head Coach Neil MacFarlane said: “I think the key to this move is that Ali can now go and play men’s football at a stage in his career where it’s vitally important.
“Ali has been within the Brentford B strategy and has been unable to force his way into the first team. He’s a really good footballer and he has handled himself properly in the months leading up to this move and we wish him all the very best.
“As I’ve mentioned a number of times, not all players will make the first team but within the development of the B Team you have to have good characters and Ali is certainly one of them. He will add to any squad and I am sure that Waterford will feel lucky to have him.”
Everyone at Brentford Football Club would like to wish Ali the best of luck as he makes the next step in his career.