The winger becomes the fifth academy graduate to step up ahead of the 2026/27 season, joining Macenzzie Duncan, Jack Oliver, Johnny Ventisei and Matthew Urwin in making the transition to the senior squad.
Watson's signing caps a breakthrough week. He made an immediate impact on his debut against Benetton, becoming the first Glasgow player in 20 years to score a try and earn Player of the Match honours on debut. He also helped lift the Scottish-Italian Shield at full-time at Scotstoun.
A former Scotland U20 international, Watson scored three tries in five appearances during last year's U20 Six Nations. He later featured for Glasgow Warriors A against Benetton U23 and Black Lion, before impressing in pre-season fixtures against Bath and Northampton Saints.
His performances earned him a call-up to Emerging Scotland for their match against Tonga XV at Scotstoun last November.
The Biggar RFC product, who can also play at full-back, follows in the footsteps of his grandfather Bill Watson, a Scotland international in the 1970s.
Watson told glasgowwarriors.org: "Making my debut was just a class feeling - to run out at Scotstoun in front of such a good crowd, that was really special. To score as well was an unforgettable feeling.
"All the boys in the back-three have been brilliant with me since I've come into the environment. Josh [McKay] has been class with me and really supported me through my journey so far, and then to also have the two Kyles [Steyn and Rowe] and Ollie [Smith] to learn from is incredible for me.
"It's also so good to see everyone's hard work paying off - I've grown up playing with guys like Johnny [Ventisei] and Matt [Urwin], so to see all of us signing pro contracts is a great feeling. I just want to keep working hard in training and see where it goes, and take any opportunity that comes my way."
Head Coach Smith added: "Fergus has worked hard at his own personal and physical development, and those efforts were in full evidence on Friday night.
"He is a player that we believe has all the attributes necessary to be a real asset to his squad, with his pace and ball-carrying evident throughout training and in his performance last weekend.
"He is also eager to learn from those around him and continue his own progression, and we look forward to watching him continue to grow as a Glasgow Warrior."