The 19-year-old scored five goals as they secured the Scottish title last season but an influx of new players over the summer left him on the fringe of Neil Lennon's plans.
Watt, who scored in Celtic's famous Champions League win over Barcelona last season, has represented Scotland at all junior levels and earned his first senior call from Gordon Strachan back in May.
He signed a new contract with Celtic last year and hopes his loan move will give him the chance to impress Lennon from afar, improving his chances of a regular spot in the Celtic side in the future.
"I'm glad I've signed," Watt said in an interview on Lierse's official website. "It came about on Friday and all happened very fast.
"I had a meeting at Celtic and got told there was an option to come here. It's a good opportunity and I'd like to give it a try.
"I've heard about the club before and I spoke to Rami Gershon (who was at Beveren) and he's told me a lot of good things about Belgian football, so hopefully I can do well here and score some goals."