Meanwhile, Hull City are still looking anxiously over their shoulders in the battle to avoid the drop.
Wigan had chances galore and failed to take them and with six minutes left, gritty Hull looked set to earn a vital point.
But bargain buy midfielder Watson crowned a man-of-the-match performance when he pounced on a punched clearance from Matt Duke to lob the ball into the net.
Antonio Valencia was a late withdrawal for Wigan with a hamstring problem and Hugo Rodallega was drafted in as replacement.
City had Kevin Kilbane making a return to the JJB Stadium after his January switch and Dean Marney was back in the side with the absentees including Ian Ashbee and Anthony Gardner.
Hull had enjoyed a charmed life early on as Wigan twice went close to scoring in the early minutes.
Maynor Figueroa almost struck when Duke was caught by surprise by a hopeful ball into the box and he was relieved to see it hit the woodwork before being cleared for a corner.
Busy midfielder Michael Brown set up the next chance after robbing Marney to set Charles N'Zogbia away.
He picked out Watson with the cross but the ex-Crystal Palace man failed to cash in on what was a clear-cut chance.
Wigan threatened again with Paul Scharner and Rodallega combining well in a terrific attack which again lacked the finish as Mido blazed over.
Sam Ricketts halted another Latics raid with a foul on Scharner just outside the box which cost him a booking, but Duke had no problem holding the free-kick hammered in by Rodallega.
Wigan were well on top but another quality attack ended with Mido volleying over the bar after some excellent build-up play.
Keeper Duke saved the Tigers with a top save from Rodallega and even though it was too hot to handle, he recovered well to deny Scharner the follow up.
N'Zogbia failed to re-appear after the break following his collision with Kamil Zayatte late in the first half.
And Chris Kirkland was in early action with a great save from Manucho's header from a Marney corner - Hull's first real threat of the game.
Wigan were out of luck again when Duke just beat Watson to the ball after Rodallega failed to get in a clean strike.
Watson blasted another into the side-netting and Rodallega hit the post with a header but with time running out, the flame-haired midfielder finally produced the killer blow.
In stoppage time, referee Andre Marriner had to be replaced by fourth official Mike Dean, but Wigan successfully played out time to secure three potentially vital points.