By By Agence France-Presse
Raheem Sterling and Gabriel Jesus each scored twice, while David Silva and Kevin de Bruyne netted to cap a glorious campaign with the biggest margin of victory in a FA Cup final since 1903.
City also lifted the Community Shield in August for a clean sweep of domestic silverware, but again missed out on the Champions League as Tottenham edged their quarter-final tie on away goals.
Winning the European Cup for the first time in the club's history remains the holy grail for Guardiola, but he believes his side have raised the bar in England for consistent brilliance.
"It means being consistent every three days during 10 months," said Guardiola. "I love the Champions League but do that (the treble) is more difficult than winning the Champions League."
Watford's wait to win their first ever major piece of silverware goes on as after going behind they had little answer to Guardiola's relentless champions.
It could have been very different for the Hornets had Roberto Pereyra not missed the first big chance of the game when he fired too close to Ederson with just the City goalkeeper to beat.
"You have to score that chance if you want some chance to win the game," admitted Watford boss Javi Gracia.
Gracia's men also played a big part in their own downfall for the opening goal on 26 minutes from which City never looked back.
The diminutive figures of David Silva and Sterling both won headers against taller defenders before the ball broke for the Spaniard to fire across Heurelho Gomes.
City control then turned into total dominance as a gloriously crafted second gave Watford a mountain to climb.
- Super sub De Bruyne
Bernardo Silva's curling cross picked out Jesus at the back post and the Brazilian was finally credited with the goal after the match despite Sterling making sure by smashing the ball into the net.
Gerard Deulofeu had been Watford's star of a remarkable semi-final comeback from 2-0 down against Wolves and had the chance to spark the game back into life just before the hour mark, but scuffed his shot wide.
And again Watford's profligacy was quickly punished.
City's strength in depth was in evidence as Guardiola could afford the luxury of leaving Sergio Aguero on the bench for Jesus and introduce De Bruyne 10 minutes into the second half.
Jesus' unselfishness allowed the Belgian, who won man-of-the-match despite not starting, to end an injury-ravaged season on a high by rounding Gomes to fire City's third into an empty net.
And the roles were reversed 22 minutes from time when De Bruyne's pass released Jesus in behind to get the goal his performance deserved.
Sterling then rubbed more salt into Watford wounds in the final 10 minutes as he converted Bernardo Silva's low cross and then fired home at the second attempt three minutes from time.
"I grew up here and saw this stadium get built. It's a massive dream come true to win trophies here," said Sterling."
City have now won all 11 meetings between these two sides by a combined score of 38-6 since the club's Abu Dhabi takeover a decade ago.
Questions will continue to be asked of the legitimacy of how City amassed such a great side with UEFA, FIFA and FA investigations pending into City's conduct off the field.
"We are not guilty until proven," added Guardiola. "That money helps to buy incredible players we have, after that we wait.
"If we are punished we will accept it. But I listen (to) my chairman, my CEO. They gave me the arguments why we are investigated and I trust them."
But on the field, the status of the side Guardiola has moulded as one of England's greatest is now secure.