Watson sustained the injury in a collision with Raheem Sterling in the first half of the game at Anfield.
The midfielder received lengthy treatment on the pitch before hobbling off and being replaced by David Jones.
Martinez has now confirmed Wigan's worst fears that Watson sustained a serious injury in the incident, but he excused Sterling of any blame.
"I haven't seen the challenge back, but I don't think any of the players were looking at each other," said Martinez.
"Both were looking at the ball - it's a real accident. It's a nasty collision.
"He has a fracture and we are going to assess him now because maybe he will require surgery. We will see what the extent of the breakage is and what treatment he needs.
"We are really disappointed because he was at a good level. We will keep our fingers crossed we can treat the breakage in a more conservative way."