Airdrieonians man Watt placed the ball in the bottom corner following good work from Robert Thomson.
He then turned provider as player-manager Darren Dods headed the second.
Watt and Thomson found the net to put the game beyond the second-bottom side before Forfar defender Gareth Rodger was sent off in the last minute.
The victory takes Brechin to within four points of Forfar, although the Loons have a game in hand over City and Cowdenbeath, who are a further three points ahead.
Match ends, Brechin City 4, Forfar Athletic 0.
Second Half ends, Brechin City 4, Forfar Athletic 0.
Scott Shepherd (Brechin City) wins a free kick in the attacking half.
Second yellow card to Gareth Rodger (Forfar Athletic) for a bad foul.
Foul by Gareth Rodger (Forfar Athletic).
Robert Thomson (Brechin City) is shown the yellow card.
Attempt missed. Bryan Hodge (Forfar Athletic) left footed shot from outside the box is just a bit too high.
Attempt saved. Scott Shepherd (Brechin City) right footed shot from the centre of the box is saved in the bottom left corner.
Corner,  Forfar Athletic. Conceded by Jonathan Tiffoney.
Foul by Jamie Montgomery (Brechin City).
Euan Spark (Forfar Athletic) wins a free kick in the defensive half.
Corner,  Forfar Athletic. Conceded by Graeme Smith.
Corner,  Forfar Athletic. Conceded by Darren McCormack.
Foul by Jonathan Tiffoney (Brechin City).
Gareth Rodger (Forfar Athletic) wins a free kick on the left wing.
Substitution, Brechin City. Jamie Montgomery replaces Liam Watt.
Attempt saved. Thomas O'Brien (Forfar Athletic) header from the centre of the box is saved in the top centre of the goal.
Corner,  Forfar Athletic. Conceded by Darren McCormack.
Goal!  Brechin City 4, Forfar Athletic 0. Robert Thomson (Brechin City) header from the centre of the box to the high centre of the goal. Assisted by Willie Dyer.
Euan Spark (Forfar Athletic) is shown the yellow card for a bad foul.
Robert Thomson (Brechin City) wins a free kick on the left wing.
Foul by Euan Spark (Forfar Athletic).
Substitution, Forfar Athletic. Bryan Hodge replaces Martyn Fotheringham.
Attempt missed. Martyn Fotheringham (Forfar Athletic) right footed shot from outside the box misses to the right.
Attempt saved. Liam Watt (Brechin City) right footed shot from outside the box is saved in the bottom left corner.
Steven Craig (Forfar Athletic) hits the bar with a header from the centre of the box.
Substitution, Forfar Athletic. Omar Kader replaces Derek Young.
Attempt saved. Scott Shepherd (Brechin City) right footed shot from outside the box is saved in the bottom left corner.
Corner,  Brechin City. Conceded by Darren Hill.
Gareth Rodger (Forfar Athletic) is shown the yellow card for a bad foul.
Scott Shepherd (Brechin City) wins a free kick in the defensive half.
Foul by Gareth Rodger (Forfar Athletic).
Euan Smith (Brechin City) wins a free kick in the defensive half.
Foul by Scott Martin (Forfar Athletic).
Robert Thomson (Brechin City) wins a free kick on the left wing.
Foul by Gareth Rodger (Forfar Athletic).
Substitution, Brechin City. Euan Smith replaces James Dale.
Substitution, Brechin City. Scott Shepherd replaces Andy Jackson.
Attempt saved. Andy Ryan (Forfar Athletic) right footed shot from very close range is saved in the top centre of the goal.
Foul by Craig Molloy (Brechin City).
On-loan midfielder Liam Watt bagged a brace as bottom-of-the-table Brechin City secured a victory over fellow League One strugglers Forfar Athletic.