Watson tore the ACL in his right knee during practice last week, although video showed that he may have initially been injured during a Week 8 loss to the Seattle Seahawks.
A source previously told Schefter that the projected timeline for Watson's recovery is eight to nine months. Watson returned from a torn left ACL in five months while he was a college quarterback at Clemson.
The rookie quarterback was placed on injured reserve Friday after a blistering start to his NFL career, when he threw for 19 touchdowns in seven games.
Tom Savage replaced Watson at quarterback for a 20-14 loss to the Indianapolis Colts on Sunday. T.J. Yates was the backup against the Colts, and the team signed Josh Johnson to the active roster Tuesday.