According to Mike Florio of Pro Football Talk, the Rams want to surround quarterback Jared Goff with as many weapons as possible.
In acquiring Watkins and a 2018 sixth-round pick from the Bills, L.A. sent cornerback E.J. Gaines and a 2018 second-round pick to Buffalo.
Austin signed a four-year, $42 million extension last year through 2021, but the Rams can release him after 2018 without incurring any dead money, per Spotrac.
The Rams selected Austin with the No. 8 overall pick in the first round of the 2013 NFL draft out of West Virginia.
Although he hasn't developed into a true No. 1 receiver, Austin has been a valuable player on offense and special teams due to his all-around skill set.
Last season, Austin set career highs with 58 receptions for 509 yards, while also reeling in three touchdowns. He rushed for 159 yards and a score as well, and was the team's primary punt returner.
Austin has three punt return touchdowns in his career, so his use to the Rams goes well beyond being an ordinary receiver.
With Watkins joining former Bills teammate Robert Woods as part of L.A.'s receiving corps, Austin figures to work primarily out of the slot on offense with some backfield work potentially mixed in as well.
After seemingly having one of the weakest receiver groups in the NFL for years, the Rams have now put Goff in position to succeed by teaming Watkins with Austin, Woods and rookie third-round pick Cooper Kupp.