Watson, to retire at the end of the season, was stripped last year of his 2012 Brownlow as a result of the Essendon supplements saga.
AFL chief Gillon McLachlan earlier this year claimed to have the medal but declined to elaborate on how he ended up with it.
“All I’m saying is, the medal is with me,” he said.
The exact whereabouts of the medal – and how it ended up there – has long been a source of intrigue.
Watson’s cousin, St Kilda midfielder Seb Ross, last month said there was a chance the medal was hanging over his grandparents’ mantle.
Watson’s manager Craig Kelly suggested the Essendon veteran’s pet bulldog Benson had eaten the medal.
Quizzed on Wednesday, Watson admitted he owed his Nan an explanation but shed no light on the medal’s whereabouts.
“I gave her a replica… I probably should tell her that it’s a fake,” he said.
“My dog Benson didn’t eat it because I’ve never had it.
“The last time I saw it was in 2012. I gave it to my parents so I assumed that they sorted it out.”
Watson admitted the turmoil of the supplements saga had almost driven him from the game.
But the pain of being banned from playing stung more than being stripped of the Brownlow, which was later jointly awarded to runners-up Trent Cotchin and Sam Mitchell.
“The medal didn’t really matter to me – it wasn’t important,” Watson said.
“I think the people whose opinion I value and who know me the best, they haven’t changed because I had to hand back the Brownlow Medal.”
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