Watson missed Australia's victories in the first two encounters in the five-match series because of a calf problem and has been recalled as an opener for the third and fourth matches in Canberra on Wednesday and Sydney on Friday.
"Shane Watson comes back into the squad ... as an opening batsman. Shane has recovered from his injury and we look forward to seeing him get back to his best," chief selector John Inverarity said.
Khawaja made eight not out and three as Australia beat West Indies by nine wickets and 54 runs in the first two matches in Perth.
Squad: Michael Clarke (captain), George Bailey, Ben Cutting, Xavier Doherty, James Faulkner, Aaron Finch, Phillip Hughes, Mitchell Johnson, Glenn Maxwell, Clint McKay, Mitchell Starc, Matthew Wade, Shane Watson.