pair apple watch with mac

I have upgraded to OS X siera and am interested in being able to unlock my mac with my Apple Watch. I know how to follow the steps to turn that setting on in preferences but it appears to be hidden because my watch is not paired with my mac. I have learned this because when I search system preferences with they keyword "watch" it says the option to unlock the computer with watch is hidden if the watch is not paired. I didn't know that was possible. Can someone tell me how to pair the watch with the mac?