Laws said: "Steve could no longer take the pain and, having seen the surgeon, it was decided that immediate action was necessary. He has undergone a three-hour operation on his hip, which will help relieve the pain and discomfort.
"It is obviously a big loss for us because he is a quality player and a fit Steve Watson is a valuable player.
"Unfortunately he's in the last year of his contract and that's put him in a difficult position, but we will talk to Steve about that as matters progress.
"He's been magnificent this season and has played through the pain barrier on a number of occasions. When he has played he's been one of our best players, but for his own welfare this had to be done and I would like to thank him for his commitment."
Watson added: "In all it will probably be four months, which is a nightmare, but it had to be done. I had been carrying this injury through most of the season and had a number of injections.
"I have missed a fair number of midweek games, which wasn't ideal but since the Christmas schedule the hip stopped recovering after games.
"My last full game was against Ipswich (January 10) and for three weeks after that I did very little training. Once I did start training it wasn't getting any better and I was struggling to shoot and turn so it was a bad scenario for all involved."
Watson, whose career stretches back to 1991 when he made his debut as a 16-year-old for hometown club Newcastle, added: "Once the surgeon told me there could be long-term implications there was only one decision to be made, but the club have been brilliant and the gaffer has been right behind me."