Mr. Dogus, a restorer and personal friend of Jeremy Corbyn, was selected, despite speculation that Mr. Watson had agreed to resign as long as a member of his team took his place. Out of 34 seats at which a Labor MP retires, is suspended, or retires, 21 candidates are Corbyn allies, according to an analysis by the Sunday Times.
Mr. Dogus supported Yvette Cooper in the 2015 Leadership Contest, but Mr. Corbyn, who participates in the British Kebab Awards he founded, is said to have "really liked" him.
Mr. Watson, an 18-year-old MP, announced on the first day of the election campaign that he would step down and cite "personal, non-political" reasons for his decision.
Mr. Dogus, who owns three restaurants in London, said he was "proud" to have been selected as a candidate and "would not waste time leading the fight to the Tories."
He said, "I want to pay tribute to Tom Watson, who has served the West Bromwich East constituency so diligently."
"I'm proud to call him a friend and realize that as a Labor candidate I have to fill big shoes."
He looks forward to "meeting the local people and listening to their concerns".
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He said, "I have the opportunity to fight for the local people, promote communities and businesses, and provide the appropriate services people deserve here."
Earlier this year, Mr. Dogus received death threats on social media for having left an anti-Brexit message in his restaurants.
He refused, the message saying "Brexit is bad! Immigrants make Great Britain! They also cooked today and served their food. "
Last week, Sally Gimson, a "Corbyn skeptic," who was overwhelmingly selected as a Labor candidate for Bassetlaw in Nottinghamshire, was removed after party officials said they had received a dossier allegations of their behavior.
The pro-city councilwoman from Highgate in north London has dropped a challenge on Friday against her expulsion.
A Labor insider told The Sunday Times: "Corbyn has gained control of the party. If the left is not at war with the right, it is at war with itself. "