Needing a point to be certain of qualifying for the Champions League, Vincent Kompany put Pep Guardiola’s side ahead after only five minutes at Vicarage Road.
Sergio Aguero scored twice, Fernandinho made it four before half-time and Gabriel Jesus added a fifth in the second half.
City have ended the 2016-17 campaign with a flourish, scoring 15 goals in their final four games.
But neither that nor automatic qualification for the Champions League group stage will disguise the fact they have underachieved in Guardiola’s first season in English football, finishing 15 points behind champions Chelsea.
It was Watford’s sixth successive defeat, their worst run for 44 years, and left them one place above the relegation places.
It was a miserable way for Walter Mazzarri, their head coach, to end his only season at Vicarage Road.
It had been announced last week that the Italian would be parting company with the club, which is now looking for its ninth manager since the Pozzo family bought the club in June 2012.
Injuries have been his main excuse and they were a factor again yesterday.
Watford were without six defenders through injury and suspension and so short of fit players that Mazzarri named two goalkeepers among the substitutes.
So it was no surprise that City dominated and might have been ahead after only 50 seconds when Leroy Sane’s chip was chested off the line by Jose Holebas.
But four minutes later they did take the lead when Kompany was left unmarked and unchallenged to head in Kevin de Bruyne’s corner from the right.
M’Baye Niang shot wide for Watford but City were doing most of the attacking, especially down their right, where Watford’s 19-year-old left back, Brandon Mason, was having a difficult first Premier League start.
– ‘Get out’ –
It could have been 2-0 to City after 15 minutes when Jesus passed to Aguero instead of shooting with only Heurelho Gomes to beat.
But Watford’s stand-in centre back Valon Behrami got across to prevent the City man steering the ball into the empty net.
Then it was Gomes getting in the way of a shot by Aguero.
Watford could not hold out indefinitely and City doubled their lead after 22 minutes, Aguero collecting De Bruyne’s pass through the stumbling Watford defence and shooting low past Gomes into the far corner.