Watson, who remains angry about the team's hiring practices, is open to a trade to the Miami Dolphins that would send Tua Tagovailoa and additional draft-pick compensation back to Houston, sources told Chris Mortensen of ESPN.
The star has a no-trade clause in his recently signed $156-million extension.
The Dolphins have two first-round picks in the 2021 draft - No. 3 overall, which Houston traded to them as part of a deal for left tackle Laremy Tunsil, and their own No. 18 selection. Tagovailoa was the No. 5 overall pick in last year's draft but produced an uneven rookie season after coming off a major hip injury.
Watson is reportedly unhappy he wasn't involved in hiring new general manager Nick Caserio after team owner Cal McNair told the 25-year-old he would be a part of the decision.
The Texans owner apparently eschewed the advice of a hiring firm by picking Caserio over Pittsburgh Steelers executive Omar Khan.
Watson reportedly also pushed for Houston to interview Kansas City Chiefs offensive coordinator Eric Bieniemy for its head coaching vacancy. However, the AFC South club was the only team with an opening to not request to meet with Bieniemy.
McNair confirmed reports that the team hasn't spoken to Watson since deciding on Caserio as its new GM in a press conference Friday.
Watson produced a career season amid Houston's 4-12 campaign, throwing for an NFL-high 4,823 yards and 33 touchdowns against seven interceptions.