Watson, who became the figurehead of Latics' improbable cup triumph at Wembley in May when he headed in the winning goal against Manchester City, was in hospital on Tuesday night after their game with Barnsley amid fears of a second broken leg in 15 months.
The midfielder left the DW Stadium pitch on a stretcher and required oxygen through a mask after a full-blooded first-half challenge with Martin Woods left him in clear distress.
Wigan boss Uwe Rosler said he was unsure of the true extent of the damage in the immediate aftermath of his side's 2-0 win, but the club have now confirmed that Watson's injury is as serious as first feared.
It means Watson, who has scored in each of Latics' last two cup ties, will not feature in a repeat of last year's final when Wigan play City in this year's final-eight round next month and indeed he may never appear for the club again with his contract due up this summer.
Watson has fractured both his tibula and fibula in the same leg which he broke playing against Liverpool in November 2012. Despite that, Wigan insist the injury is not career-threatening,
"Ben will receive the best possible treatment and we will do everything to help him make a speedy recovery," Rosler told the club's official website.
"He is a terrific professional, a fighter, and I am sure he will return from this latest setback like he did a year ago when he went on to experience the high of scoring the winning goal in the FA Cup final at Wembley, and write himself into the heart of every Wigan Athletic supporter.
"To lose a player and a person of Ben's quality is a big blow to us but we will re-group and move on as a squad and keep trying to achieve our goals for the season, with the added incentive now of doing it for Ben."