Watsons Bay is a harbourside, eastern suburb of Sydney, in the state of New South Wales, Australia. Watsons Bay is located 11 km north-east of the Sydney central business district, in the local government area of the Municipality of Woollahra. Watsons Bay sits on the end of the South Head peninsula and takes its name from the sheltered bay and anchorage on its western side, in Port Jackson. It provides views across the harbour to the Sydney Harbour Bridge.