The 23-year-old centre-back has linked up with the Latics for a second loan spell after winning the 2021/22 League One title at the DW Stadium.
Watts, who made his Premier League debut for his boyhood club against Liverpool on the final day of the 2019/20 campaign, spent the second-half of the 2022/23 season on loan at Peterborough United and reached a century of EFL appearances after previous loan spells at Stevenage, Plymouth Argyle and Mansfield Town.
Shaun Maloney's side, relegated from the Championship last term, will begin the new season on minus eight points in the English third tier, with the Tics facing Derby County at Pride Park in their opening league fixture on Saturday, 5th August.