Referee John Beaton initially took no action following a challenge by Watt on Well midfielder Sean Goss in the 40th minute of the Tannadice clash, only to brandish a red card after being asked to consult the pitchside monitor by the VAR officials.
United submitted an appeal against the hotly-debated decision, citing a camera angle which appeared to show Watt pulling out of the tackle, and following a fast-track Scottish FA hearing, the sending off has been downgraded and replaced with a caution.
A United statement confirmed: "At the time, it was interpreted that Tony has been guilty of Serious Foul Play but this has been downgraded to a caution under the offence ‘Reckless tackles or challenges an opponent.'"
Speaking after the match on Saturday, United boss Liam Fox said: “The footage that the referee has seen, I agree – it looks like a red card.
"I've also seen other images and other footage that put a fair bit of doubt whether it actually is a red card. I'm not saying VAR got it wrong. I'm just saying I've seen other angles that make it not as clear cut."
BBC Sportscene pundit Michael Stewart had also stated he would be "flabbergasted" if United did not lodge an appeal.
"If you speak to any football player, they will say that is not a red card," said Stewart. "There is no force in it.
"You have to play in reality. Watt barely makes contact with Goss. That is never a red card. Possibly a yellow, never a red."