The actor, who portrayed Gandalf in the Peter Jackson's movies, will star as the Beast's loyal butler Cogsworth, who is turned into a clock due to a curse, reported Variety.
Dan Stevens has been previously cast as the Prince, Watson will star as Belle, Luke Evans will star as Gaston, Josh Gad will portray Gaston's sidekick LeFou, and Emma Thompson will portray Mrs Potts.
Other cast members include Kevin Kline as Belle's father.
Bill Condon is directing the movie from a script written by Stephen Chbosky.