Auto unlock with apple watch option not present on MacBook Pro M1

Hi there dusan224,

If you are not seeing the option to unlock your Mac with your Apple Watch, ensure your devices are set up as follows:

• Your Mac has Wi-Fi and Bluetooth turned on.

• Your Mac and Apple Watch are signed in to iCloud with the same Apple ID, and your Apple ID is using two-factor authentication.

• Your Apple Watch is using a passcode.

Also: 

Make sure that your Mac isn't using Internet sharing or screen sharing.

This information can be found here: Unlock your Mac with your Apple Watch

If you still do not see this option, then ensure the password for your user account only contains the following characters:

• Uppercase or lowercase letters A to Z
• Numbers 0 to 9
• Underscores
• Hyphens
• Periods

If any characters other than these are used in your user password, change it in System Preferences > Users & Groups to a password that only contains these supported characters, restart your Mac, and then see if the option to unlock with your Apple Watch appears.

Cheers!

Click on the "Privacy" tab and it should be there. But good luck, I have an Apple Watch 4 that the iMac suddenly can't communicate with to allow the watch to unlock it!