NFL Network's Ian Rapoport and Mike Garafolo noted that the Texans are designating Watt to return from injured reserve Tuesday.
The three-time NFL Defensive Player of the Year tore his pectoral muscle in October and was expected to miss the rest of the season, although head coach Bill O'Brien didn't rule out a potential return for the playoffs when asked about it earlier this month.
Watt also played only a combined eight games in 2016 and 2017, undergoing back surgery and suffering a tibial plateau fracture during that time frame.
When healthy, Watt has been one of the best players of his generation. He won the Associated Press Defensive Player of the Year in 2012, 2014 and 2015, is a five-time All-Pro selection, has five Pro Bowl nods and led the league in sacks in 2012 (20.5) and 2015 (17.5).
Prior to getting hurt this season, Watt had four sacks and three passes defensed in eight games.
The Texans already clinched a spot in the playoffs as the AFC South champions. They can finish as the No. 3 seed with a victory over the Tennessee Titans and a loss by the Kansas City Chiefs to the Los Angeles Chargers on Sunday.