Farrell's change of codes, completed in March, has been jointly funded by Saracens and the Rugby Football Union and would prove a costly mistake should the 30-year-old fail to translate his success at league to Vicarage Road.
Diamond insists his player is making good progress and is ready to give him his debut in Saturday's pre-season friendly against Bedford, but warned not to expect fireworks straight away.
"We won't judge Andy early doors - it will be eight, nine or 10 weeks into the season before we start doing that," said Diamond, who will deploy Farrell at inside centre for his first few matches.
"He's settled very well - it's as if he's been here for two or three years. He's adapted very well to the new game.
Everyone knows his abilities as a rugby player, so he hasn't had many problems.
"But while it will take him to time to get up to scratch, we won't be messing our team about to suit Andy Farrell. He's joined our club and contrary to what people think, he is contracted solely to Saracens.
"We will do what's best for Saracens and if that means moving him around in terms of his position, that's what we'll do."
There is considerable pressure for Farrell to produce the goods as he is the riskiest cross-code move yet, but he insists the burden of expectation will be no different to when he was at Wigan.
"I'm tough on myself - if I do things wrong there's nobody more disappointed than me. I suppose there's a bit of pressure as far as the media is concerned, but that would be there if I played union or league," he said.
Farrell has been fast-tracked into England's elite player squad - he was given his call-up by head coach Andy Robinson last week - but he admits he has much to learn before winning his first cap for the world champions.
"I was very pleased to get the call-up. I know I'm very fortunate. But I've a long way to go because it's only a squad. I'll have to play very well to get picked for any England matches, so I'm not reading too much into it," he said.
Saracens have also announced a coaching restructure. Diamond is to move up to director of rugby with defence coach Mike Ford, the former Wigan and Castleford scrum-half, taking over as head coach.
The changes will be made after Ford's current commitments with the Ireland national side end.