Use this checklist to unpair, erase, and remove Activation Lock from your Apple Watch before giving it to the next owner.
Use this path on your iPhone:
Place your Apple Watch and iPhone near each other before starting the reset process.
On your iPhone, open the Watch app, then tap All Watches.
Tap the ⓘ button beside the Apple Watch you want to sell.
Tap Unpair Apple Watch. If it is a cellular model, choose whether to remove or keep the cellular plan. For selling, remove it.
Enter your Apple Account password when asked. This removes Activation Lock so the buyer can set it up.
Your Apple Watch will erase and unpair. Keep it near your iPhone until the process is complete.
When the Watch shows the pairing screen, do not pair it again. It is ready for the buyer.
You can erase the Apple Watch directly, but you may still need to remove Activation Lock from your Apple Account.
Check each item before handing the Apple Watch to the buyer.
The buyer should see the Apple Watch pairing screen. If it asks for your Apple Account, Activation Lock was not removed yet.