The update comes with Villa working to raise a significant amount of money from player sales this summer due to UEFA's updated spending rules ahead of their return to the Champions League in September.
Villa have broken UEFA spending rules in each of the last two seasons, leaving Unai Emery in a difficult position ahead of the 2026/27 campaign.
UEFA rules state competing clubs cannot spend more than they earn on transfers, meaning Villa may be forced to sell players to balance their books.
Emery has already spent a combined £90M to bring in Joao Gomes and Johan Manzambi alongside offloading Youri Tielemans and Donyell Malen at the start of the summer.
Sky Sports claim Fenerbahce have registered their interest, but no formal contact has been made to Villa, with several Premier League clubs also considering an offer.
Watkins is under contract at Villa Park until 2028, so the club could demand in the region of £40M for the 30-yar-old attacker, who has hit double figures in goals in each of the last six top-flight seasons.