How to unpair watch from lost phone
How to unpair Apple Watch from former Apple phone
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Put your Apple Watch on its charger
Press and hold the side button as if you were going to power it down
Do a firm press on the POWER OFF slider and let go
Tap Erase all content and settings
Alternately, you can go to Settings/General/Reset to erase and unpair your Apple Watch if you know your passcode, but the option above is faster.
Or;
Log on to icloud.com on a computer and remove your Apple Watch under Account Settings/My Devices.