The Watch app on the paired iPhone controls the process of unpairing an Apple Watch from another device. Begin by opening the watch list then choose your watch from the options before tapping the “Unpair Apple Watch” option. The next step requires you to confirm and then type your Apple ID password to deactivate the Activation Lock function. After reset the watch becomes ready to connect with another device.
To unpair your Apple Watch from another device, open the Apple Watch app on your iPhone, tap on the "My Watch" tab, then select "All Watches." Tap the "i" button next to the watch you want to unpair and choose "Unpair Apple Watch".