The match aggregate was the second highest in the history of the Cheltenham & Gloucester trophy, after the 867 between Surrey and Glamorgan on this ground in 2002.
Watson's century eclipsed a magnificent maiden hundred by Jon Batty, who went on to produce a superb all-round wicketkeeping performance.
If the Hampshire bowling had looked too loose, then Surrey's attack positively unravelled under Watson's onslaught.
The Australian, making his first appearance of the season for Hampshire after fulfilling his one-day duties with the tourists, stoked up the fires of resistance with casual savagery as he clouted, clobbered and clubbed the Surrey bowlers all around the ground.
There had been a solitary six in the Surrey innings, scored by Batty. Hampshire had seven, two each to Nic Pothas and Craig McMillan and three to Watson.
The imposing asking rate of seven an over was never a problem to Hampshire. Once Pothas had shown what was possible, the rest followed suit. John Crawley and Watson raced along adding 78 in a dozen overs for the third wicket.
McMillan entered into the spirit of things to add 81 before getting himself stranded after trying to steal a single to a misfield. Nayan Doshi's throw to Batty was not the greatest but the athletic wicketkeeper dived, stretched and broke the wicket.
Batty's innings was perfectly paced rather than punishing. He was always in control, prepared to improvise whenever the opportunity presented itself. The pity of it was that it was all in vain.
He shared in a superb opening stand of 142 with the rookie James Benning, who contributed a career-best 73, and one of 115 with Graham Thorpe.
And while he and the England reject Thorpe were rattling along there looked to be an outside chance of Surrey getting close to emulating their feat in this competition three years ago when they smashed Glamorgan for 438, only to see the Welsh side respond quite brilliantly and get to within nine runs of Surrey's record total.
Thorpe made a consummate 60. After his departure the Surrey batsmen came and went in a flurry of lusty blows, but Batty remained, entering Surrey history with the second highest score in the competition after Alistair Brown's 268 in that 800-run fest of four years ago.