In a shock announcement, the Labour veteran said he would give up frontline politics after almost four decades to campaign on public health matters, staying on in his role until the 12 December election.
Mr Watson claimed he was standing down for “personal, not political” reasons but his decision to quit will raise eyebrows, after he repeatedly clashed with Jeremy Corbyn over Brexit and antisemitism.
Political allies said that he had been frustrated by the losing battle to reclaim the party’s soul for its moderate tradition, and wanted the opportunity to enjoy life outside politics with his partner and children, pointing to his new zest for life since losing weight and regaining his health.
“If he felt that the pendulum was about to swing back very rapidly the other way, then he might have hung on,” said one moderate Labour MP. “Perhaps he thought the road ahead was a long, not a short one.”
Another told The Independent: “I think he had given up on the hope that Labour would ever go back to what it was. There are a lot of people who have served the party who are now thinking it’s time to pursue other careers.”
One MP said Watson had taken “incredible abuse” as he became a rallying point for critics of Corbyn within the party and had been frustrated to see junior colleagues from the Corbynite left given more of a hearing in shadow cabinet than the deputy leader.
Directly elected to his position with more than 50 per cent of members’ votes on the same day Mr Corbyn took the leadership in 2015, Mr Watson was the one shadow cabinet member the leader had no power to sack or demote.
He used this immunity to establish himself as an alternative pole of influence within the Labour movement. His Future Britain group was set up to provide a focal point for MPs from the social democratic tradition in the hope of preventing further splinters in the wake of the defection of a number of backbenchers to form the Independent Group earlier this year.
Without the glue provided by Mr Watson, some like-minded parliamentarians feared further breakaways by party MPs, activists and supporters.
“The problem will be if moderate-left voters now switch to the Lib Dems,” said one MP.
There was anger within Labour at the timing of Watson’s departure, which one source suggested would draw attention away from the stuttering start to the Conservative election campaign and “overshadow” Corbyn’s appearances over the vital next few days.
But others saw his resignation so near to the closure of nominations for the election as an attempt to prevent the kind of exodus which might have taken place had he quit months ahead of a poll.
In a statement published in the middle of Boris Johnson’s official launch of the Conservative election campaign, Mr Watson said: “After 35 years in full-time politics, I’ve decided to step down and will be campaigning to overcome the Tory-fuelled public health crisis.
“I’m as committed to Labour as ever. I will spend this election fighting for brilliant Labour candidates and a better future for our country.”
In a letter to Mr Corbyn, he said that becoming “healthy for the first time” had transformed his life, after he lost seven stone and reversed his type 2 diabetes.
Mr Corbyn said he knew it was “not the end of our work together” and praised Mr Watson’s commitment to the party.
“Being an MP and deputy leader of our party is far more than a job and I understand how difficult this decision has been for you to make and how deeply you have thought about it,” he added.
Mr Watson and his boss have had an infamously fractious relationship, most recently clashing over whether Labour should support a Final Say referendum on any Brexit deal.
And an increasingly bitter rivalry developed between Watson and his former flatmate Len McCluskey as the Unite union boss emerged as a power behind Corbyn’s throne.
A botched bid to remove him by the founder of the Corbyn-supporting Momentum, Jon Lansman, overshadowed Labour’s annual conference in September.
He told Mr Corbyn in his resignation letter: “Our many shared interests are less well known than our political differences, but I will continue to devote myself to the things we often talk about: gambling reform, music and arts, stopping press intrusion, obesity and public health, and of course horticulture and cycling.
“I want to thank you for the decency and courtesy you have shown me over the last four years, even in difficult times.”
Numerous MPs posted tributes to Mr Watson on Twitter.
Yvette Cooper hailed him as “a great Labour champion” and Stella Creasy described him as a “titan”. Mary Creagh said he was “a big voice for progressive pro-European policies (and) a huge loss to the Labour movement”.
Lucy Powell said she was “saddened, shocked, but on another level not completely surprised”.
“Tom has been a great friend to me over the years,” said Ms Powell. “He has served the party he loves passionately for 35 years, he deserves the chance to do other things he loves too.”
And Jess Philips said he was “a West Midlands legend and will leave such a big gap”, signing off with the message to Watson: “You’ve been great, bab.”
Mr Watson was elected to parliament as MP for West Bromwich East in 2001 and earned a bruiser’s reputation acting as a foot-soldier for Gordon Brown in his long internecine war with prime minister Tony Blair.
He was forced to resign from an early ministerial post after refusing to withdraw his signature calling for Blair to go, and was blamed by the then PM’s allies for fomenting the plotting which led to the handover to Mr Brown in 2007.
In opposition, he played a leading role in pursuing the News International phone hacking scandal as a member of the House of Commons Culture Committee, branding Rupert Murdoch’s son James a “mafia boss” during a 2011 hearing.
He played a leading role in campaigns on obesity, public health, problem gambling.
But he was also a key driver behind demands for a police inquiry into alleged child sex abuse by establishment figures, and faced calls for his resignation after the Henriques report into the collapsed investigation last month raised questions about his role.