Watson, 89, had been struggling to recover from his recent colon surgery at Wake Forest Baptist Medical Center.
He was blinded from an eye infection as a baby, but never let that slow him down.
The guitarist had been on the music scene since the 1960s--
receiving the National Medal of Arts and multiple Grammy awards for his work.
The Deep Gap, North Carolina native was known for his flatpicking and fingerstyle technique.
Watson is survived by his wife of nearly 66 years, Rosa Lee Carlton Watson and their daughter Nancy Ellen.