The 27-year-old was substituted in the 32nd minute after falling awkwardly following an aerial challenge with Reds winger Raheem Sterling.
Latics manager Roberto Martinez later confirmed the extent of Watson's injury but was unable to disclose how long the midfielder will be sidelined.
"It’s a broken leg and we really going to miss him," Martinez told reporters.
"He’s got a fracture, obviously we’re going to assess him now because maybe he need surgery.
"It’s too early to tell [how long he will be out] but we are really disappointed because Ben reached a very good level and today he was growing into the game, you could see that every time he got on the ball.
"We were penetrating with his quality and unfortunately he has got definitely a broken leg and now we will see what the type of the break is and see what treatment he needs."
The Spaniard went on to lament his side's tiredness after the international break following an encouraging first-half performance.
"We started quite sharp, I thought we controlled the game in the first half," he added.
"We were the team that looked like we were going to be real threat and stopped Liverpool completely. Unfortunately in the second half we suffered too much from the international fixtures.
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"The first goal, we gave it away and once that happened the injury to Ben Watson affected us too much. It was one of those days, nothing went our way.
"We attracted all sorts of bad decisions and all sorts of bad luck but I was very proud three or four players stood up with real pride and got on the ball and kept us competing to the end."
Martinez also hailed Liverpool striker Luis Suarez's two-goal showing, but claimed the Uruguayan was fortunate to stay on the pitch after an earlier foul.
"The first goal is a real clinical finish because it’s the first mistake that we made and it’s the sign of a top player when you get half a chance and you score a goal," he continued.
"From then on we opened the game up and the space is where he really enjoys his football.
"But he was very fortunate because there was a stamp on David Jones that the referee didn’t see and that wasn’t the sign of a top player."