Arlauskis, 28, joined Watford last summer from Steaua Bucuresti but has played only twice for the Hornets this term.
In a statement on their website, Espanyol, who are 13th in Spain's top flight, said that they had the option to make the move permanent at the end of the season.
The Lithuanian could make his debut away at the Bernabeu against Real Madrid in Espanyol's next match on Sunday.
Restore Data
| Team | P | W | D | L | F | A | GD | PTS | |
| 1 | Sheffield UnitedSheff Utd | 18 | 12 | 4 | 2 | 25 | 9 | 16 | 38 |
| 2 | Leeds UnitedLeeds | 17 | 10 | 5 | 2 | 31 | 12 | 19 | 35 |
| 3 | Burnley | 17 | 9 | 6 | 2 | 21 | 6 | 15 | 33 |
| 4 | Sunderland | 18 | 9 | 6 | 3 | 26 | 13 | 13 | 33 |
| 5 | Watford | 17 | 9 | 2 | 6 | 26 | 24 | 2 | 29 |
| 6 | Middlesbrough | 17 | 8 | 3 | 6 | 29 | 20 | 9 | 27 |
| 7 | West Bromwich AlbionWest Brom | 17 | 6 | 9 | 2 | 18 | 11 | 7 | 27 |
| 8 | Blackburn RoversBlackburn | 16 | 7 | 4 | 5 | 20 | 17 | 3 | 25 |
| 9 | Millwall | 16 | 6 | 6 | 4 | 19 | 14 | 5 | 24 |
| 10 | Norwich CityNorwich | 17 | 5 | 7 | 5 | 31 | 25 | 6 | 22 |
| 11 | Swansea CitySwansea | 17 | 6 | 4 | 7 | 16 | 15 | 1 | 22 |
| 12 | Bristol City | 17 | 5 | 7 | 5 | 20 | 21 | -1 | 22 |
| 13 | Sheffield WednesdaySheff Weds | 17 | 6 | 4 | 7 | 20 | 26 | -6 | 22 |
| 14 | Stoke CityStoke | 17 | 5 | 6 | 6 | 19 | 20 | -1 | 21 |
| 15 | Derby CountyDerby | 17 | 5 | 5 | 7 | 21 | 22 | -1 | 20 |
| 16 | Luton TownLuton | 17 | 5 | 3 | 9 | 18 | 29 | -11 | 18 |
| 17 | Coventry CityCoventry | 17 | 4 | 5 | 8 | 22 | 25 | -3 | 17 |
| 18 | Oxford UnitedOxford Utd | 17 | 4 | 5 | 8 | 19 | 27 | -8 | 17 |
| 19 | Preston North EndPreston | 17 | 3 | 8 | 6 | 16 | 24 | -8 | 17 |
| 20 | Plymouth ArgylePlymouth | 17 | 4 | 5 | 8 | 18 | 34 | -16 | 17 |
| 21 | Cardiff CityCardiff | 17 | 4 | 4 | 9 | 15 | 26 | -11 | 16 |
| 22 | Hull City | 17 | 3 | 6 | 8 | 16 | 23 | -7 | 15 |
| 23 | Queens Park RangersQPR | 17 | 2 | 8 | 7 | 15 | 26 | -11 | 14 |
| 24 | Portsmouth | 15 | 2 | 6 | 7 | 16 | 28 | -12 | 12 |
| > Championship Full Table | |||||||||
