Tasmania's Watson will act as cover for Hampshire's other Australian stars Shane Warne, set to be the County's captain, and Michael Clarke in the likely event that one or other of them are required on international duty. He will also be available as injury cover.
Watson, 22, originally from Queensland, joined Tasmania in 2000. Yet to play Test cricket, he has appeared in 23 One-day Internationals, scoring 288 runs at an average of 35 and taking 18 wickets at 35.11 apiece with his right-arm fast-medium bowling.
During the 2003-04 Australian season, Watson scored 983 runs in 10 matches at an average of 52.23, including four centuries.