Each month, the bottles will sport the work of a new artist - a total of 12 artists will be featured over the year. Labels will be changed at the beginning of each month.
The company said the bottles would be limited editions and that it would only stock a week's supply to create interest among collectors and those who support the local art scene.
The campaign kicked off this month with Mathias Woo creating the July label. Woo used people figures and a cup of hot tea, with the rising steam to represent the 'S' in Watsons Water.
"In keeping with our corporate spirit, we would like to help promote local arts and culture and let the public know more about the artists' contribution to society," said Watsons marketing director Salina Pao.