Watmough has been sidelined since the Bulldogs match at Brookvale on June 26.
His inclusion in the second row with Steve Menzies allows the powerful back row trio of Watmough, Menzies and Ben Kennedy to be reunited.
The Origin representatives are vital to Manly's semi final hopes.
With Watmough back in the forwards, versatile Luke Williamson has been chosen at five eighth alongside skipper Michael Monaghan.
Five replacements have been named with one to drop out by kick off time on Sunday.
The Manly NRL side is: Brett Stewart, Paul Stephenson, Terry Hill, Ashley Alberts, Chris Hicks, Luke Williamson, Michael Monaghan (c), Jason King, Chad Randall, Brent Kite, Anthony Watmough, Steve Menzies, Ben Kennedy. Replacements: Shayne Dunley, Nathan Tutt, Sam Harris, Kylie Leuluai, Mark Bryant(one to be omitted).
The Manly PREMIER League side to play newcastle on Sunday is: Mark Lennon,Mitch Creary,Jye Mullane,Steve Matai,Scott Donald,Michael Witt,Travis Burns,Daniel Heckenberg,Matt Ballin,Phil Moorwood,Kane Cleal,Adam Cuthbertson,J.P.Cherry (c).Replacements: Jared Taylor,Karl Johnson,Nathan Hollingsworth,Mailangi Styles,Jeff Robson,Darren peachey,Jim Curtis.
The JERSEY FLEGG side to play Newcastle on Sunday is:Josh Lewis (c),Michael Smith,Tom Joseph,Sean Meaney,Terry Kelly,Sam Key,Aaron Groom,Vic Mauro,Ian Farnsworth,Chris trembath,Reihana Peters,Mark Offerdahl,Jacob Martin.Replacements:Josh Brown,Innoxi Tapaatoutai,Joab Hull,Ina Papera,Brendan Crabb,John Grieve,Mitchell Taueli.