However, Watson has not featured for the Tannadice outfit since the 3-1 defeat against Hibernian on Boxing Day.
And boss Thomas Courts has deemed that regular first-team football will aid the youngster’s development. He will go straight into the Fifers’ squad for Saturday’s crunch fixture against Peterhead.
Stevie Crawford’s charges have not won a match in 11 attempts and find themselves eight points adrift at the foot of League One.
It is hoped that Watson can add some attacking impetus for the Methil men, who have failed to score in their last four outings.
He follows Hearts’ Leo Watson and former Dunfermline winger Ryan Blair in joining East Fife this month.