Q: cannot unlock my iMac with my apple watch

Hi

The following steps may help - check that:

• Your Mac has both Bluetooth and Wi-Fi turned on.
• Your Apple ID is using two-factor authentication (as opposed to two-step verification):
  • Two-factor authentication for Apple ID - Apple Support
  • If you are currently instead using two-step verification, follow the instructions here to turn it off (under "How do I turn off two-step verification?") before enabling two-factor authentication:
    • Frequently asked questions about two-step verification for Apple ID - Apple Support
• Your Mac and Apple Watch are signed in to iCloud with the same Apple ID:
  • On your Mac, choose Apple menu () > System Preferences, then click iCloud.
  • On your iPhone, open the Apple Watch app, then go to General > Apple ID.
  • It may help to sign out and sign back in on your Mac.
• Your Apple Watch is using a passcode:
  • On your iPhone, open the Watch app, then tap Passcode.
• Handoff is enabled on each of your iPhone and your Mac:
  • On your iPhone, go to: Settings > General > Handoff.
  • On your Mac, go to: System Preferences > General - near the bottom, check the option for "Allow Handoff between this Mac and your iCloud devices".
  • If these settings are already enabled, it may help to disable and re-enable Handoff on each device.
• If you have not yet done so, also try restarting both devices.

More information:

Automatically unlock your Mac with your Apple Watch - Apple Support

I had the exact same problem and the solution was so silly but also a bit obvious.  When your computer says unlocking with apple watch, look at the watch so that it shows the unlocked clock screen.  In other words, just raise your wrist.  It should then unlock.

As long as your Apple Watch is on your wrist and unlocked, it should not be necessary to raise your wrist or activate the display on your watch.

You can say that, but I can tell you from personal experience, it will not unlock my computer unless I raise my wrist.

I suggest that you let Apple know, as that should not be the case:

https://www.apple.com/feedback/watch.html

I was on the phone with apple about this when we discovered it.