The 43-year-old was cast in the film, which tells the story of the last two years in the life of Diana who died in a car crash in Paris in the year 1997.
Watts has had her long locks trimmed into Diana's trademark wavy bob, also she was spotted bearing an uncanny resemblance to the British royal by adopting her famous doe-eyed facial expression, reports femalefirst.co.uk.
The movie is due for release next year.
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Search Amazon for "Princess Diana The Day She Didn't Die."
A novel which is getting some great reviews from around the world and no doubt the next big film after this one.