The Donostia award -- named after the Basque word for San Sebastian -- has been given out each year at the festival since 1986 when it went to Gregory Peck.
Other past recipients include Lauren Bacall, Bette Davis, Susan Sarandon, Meryl Streep, Julia Roberts, Richard Gere and Woody Allen.
"When I read the long list of people who have received it before me I felt incredibly honoured," Watson told reporters just before the award ceremony.
Watson, 48, burst onto the film scene with Lars von Trier's 1996 film "Breaking the Waves" for which she received an Oscar nomination for her portrayal of a woman obsessively in love with her husband.
"I am not sure I knew what acting was before doing that film," she said.
Asked about what is was like to work with the Danish director, who is known for pushing his actresses hard, Watson said: "He has a reputation for being difficult but I had an amazing experience."
Critics have praised Watson's performance in her latest movie, Icelandic director Baltasar Karmakur's "Everest", based on a 1996 disaster in which eight people died in a blizzard on the world's highest mountain.
Watson, who plays a logistics coordinator in the drama, said she did not know where her career would take her next.
"You can't have a plan as an actor. I guess it really is a gypsy life, you just go with the wind and were it takes you," she said.
The 63rd San Sebastian film festival, the highest-profile film event in the Spanish-speaking world, wraps up on Saturday.
The festival was originally intended to honour Spanish language films but has established itself as one of the most important film festivals in the world.
It hosted the world premiere of Alfred Hitchcock's spy thriller "North by Northwest" in 1959 and Woody Allen's "Melinda and Melinda" in 2004.
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Other past recipients include Lauren Bacall, Bette Davis, Susan Sarandon, Meryl Streep, Julia Roberts, Richard Gere and Woody Allen.
"When I read the long list of people who have received it before me I felt incredibly honoured," Watson told reporters just before the award ceremony.
Watson, 48, burst onto the film scene with Lars von Trier's 1996 film "Breaking the Waves" for which she received an Oscar nomination for her portrayal of a woman obsessively in love with her husband.
"I am not sure I knew what acting was before doing that film," she said.
Asked about what is was like to work with the Danish director, who is known for pushing his actresses hard, Watson said: "He has a reputation for being difficult but I had an amazing experience."
Critics have praised Watson's performance in her latest movie, Icelandic director Baltasar Karmakur's "Everest", based on a 1996 disaster in which eight people died in a blizzard on the world's highest mountain.
Watson, who plays a logistics coordinator in the drama, said she did not know where her career would take her next.
"You can't have a plan as an actor. I guess it really is a gypsy life, you just go with the wind and were it takes you," she said.
The 63rd San Sebastian film festival, the highest-profile film event in the Spanish-speaking world, wraps up on Saturday.
The festival was originally intended to honour Spanish language films but has established itself as one of the most important film festivals in the world.
It hosted the world premiere of Alfred Hitchcock's spy thriller "North by Northwest" in 1959 and Woody Allen's "Melinda and Melinda" in 2004.
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