The England centre, 28, has announced he will join Gold Coast Titans on July 1 after spending his entire career so far at Emerald Headingley.
Rhinos captain Watkins has struggled this term on his return from a knee reconstruction and agreed a release from the final two years of his deal after the club tried to rengotiate his terms.
But Merrin expects him to shine in Australia and said: “I’m proud of him and I’m proud of him and his family.
“It’s always a tough decision to face up to what he’s faced these last few weeks, especially being our skipper.
“It’s definitely a tough decision. He’s copping a bit on social media from the fans.
“Just personally I think everyone needs to take a step back from him and his family and acknowledge everything he has done for this club.
“He’s been here since he was a junior, done everything for this club, won premierships, World Club Challenges, ticked every box he’s had for this team and been very loyal.
“People get caught up in the negative side of things and he’s just doing what’s best for him and his family. I’d do the same thing, too. We’re all very proud of him.
“It’s definitely sad to see him go. We all look up to him. But all credit to him on the journey he’s had and now he’s going to gop test himself in the NRL.
“I reckon he’ll go great.”
Merrin should know given he played more than 200 games in the competition, featured 13 times for New South Wales State of Origin and earned seven Test caps before joining Leeds as a ‘marquee’ signing this season.
Leeds, of course, have struggled and they are joint-bottom heading into Friday’s trip to leaders St Helens.
They pushed champions Wigan Warriors close on Friday before losing 23-14 but have made improvements of late beating London Broncos and Wakefield Trinity beforehand.
Merrin, 29, said: “It was tough to lose. Always.
“From where we were to where we are now – the criticism we’ve had and things that have gone on throughout the year – to come together, the last few weeks have been exceptional from the group. We’ve hung in tight and come together through everything.
“I still believe we should have won that game but a few things didn’t go our way. We can’t dwell on that. We have to put that one behind us and get on for Friday.
“We’ll rip in this week, fix our wrongs and get ready for Saints.”
Merrin, 29, scored in the defeat and thought he had added a second try that could have changed the course of the contest, only to see it ruled out by the video official.
Interim coach Richard Agar took over from sacked Dave Furner last month and there is certainly more steeliness to Leeds compared to earlier this year. Asked what changes Agar had made, Merrin said: “It’s a bit of camaraderie and togetherness.
“We’ve always had it there. We could have either just kept chopping blows or faced the criticism.
“And the conflict that was put in front of us and come together and push through it and come out the other end.”
Meanwhile, Rhinos back-row James Donaldson also praised Watkins.
He said: “What a role model and what a player. He’s had a tough year coming back from the ACL. I know how hard that is; I’ve come back from three.
“I know what that feels like and his best rugby is yet to come.
“It takes at least 12 months to get over an ACL and he came back playing after seven.”