He will join the publisher with immediate effect, replacing Alan Scott who is retiring on December this year, as managing director of newspapers.
Watson will oversee DC Thomson's newspaper business, which includes The Press & Journal, The Evening Express, The Courier & Advertiser, The Evening Telegraph, The Sunday Post, and The Weekly News.
DC Thomson said he will be "responsible for developing newspaper operations to create an efficient business model to build on the strength of the newspaper brands and products".
Andrew F Thomson, chairman of DC Thomson, said: "Ellis brings with him a wealth of industry experience and local knowledge.
"He lives with his wife and family in the area and will be based at both our Dundee and Aberdeen offices. I welcome Ellis to the newspaper senior management team as he gets to know our people and our business and look forward to working with him."
Watson started his newspaper career as the marketing director at News International. He has also held positions on the executive board of directors for newsagent John Menzies and transport company FirstGroup.
He left his position as chief executive of Syco in December last year.
Watson said: "I'm delighted to be back home, running these fantastic titles and working with such talented people."