Watson left the Yorkshire Post in November last year after 13 years editing the title, one of the leading regional papers in the country. He left the paper after it was acquired as part of Johnston Press's £560m takeover of Regional Independent Media.
In his new role, he will develop editorial products for both new media and traditional markets, and help the Press Association to develop its relationship with national and regional newspaper customers.
Paul Potts, chief executive and editor-in-chief of the Press Association, said: "I am delighted that Tony has agreed to join us. He has done an outstanding job as editor of the Yorkshire Post and with his talent and knowledge of the newspaper industry he will be a tremendous asset to PA and its customers."
Watson joined the Post in 1984 and was made deputy editor in 1988. A year later he took the editor's role and, during his tenure, the newspaper was named "Newspaper of the year" at the Regional Press Awards.
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