The 19-year-old Scotland international joins Palace to continue her development in the Barclays Women’s Super League 2.
After making her debut with Rangers at the age of 15, Watson earned a professional contract with the club in 2022. The midfielder soon found herself involved in UEFA Women's Champions League games, scoring against Benfica. Her impressive club form saw her named PFA Scotland Women's Young Player of the Year in 22/23.
Watson made her senior international debut in April 2023, scoring a brace against Costa Rica just four days later, before joining Manchester United in the WSL in August 2023.
Manager Jo Potter said: “Emma is a fantastic young talent who has already gained valuable experience at both club and international level. We look forward to helping her continue her progression with us this season.”
Speaking on her move to Palace, Watson said: "I'm really looking forward to the season ahead, meeting all the girls and working with Jo.
“I'm really excited to be here and I'm proud to be a Palace player."