On your Apple Watch, open Settings
Tap General
Tap Reset
Tap Erase All Content and Settings
Enter your passcode if prompted
If asked, choose to keep or remove your cellular plan
Tap Erase All to confirm
Wait for the Apple Watch to reset and restart
If you do not have access to the watch, open the Watch app on your iPhone
Tap My Watch
Tap General
Tap Reset
Tap Erase Apple Watch Content and Settings
Confirm the reset
If needed, unpair the Apple Watch from your iPhone to remove Activation Lock