However, 30-year-old Watkins could return for the Tokyo Olympics in 2020.
Grainger, 38, whose gold at London 2012 came after she was a silver medallist at the previous three Games, is yet to announce her plans.
"Rowing has to take a back seat for a while while other life-changing events take precedence," Watkins said.
"Post London I knew I'd have an enormous quandary on my hands, especially after having my son William. As an athlete, I have put so much into rowing, it took everything I had to get to that level."
It is unclear whether Watkins, who won bronze in the double sculls at the Beijing Olympics in 2008, will compete in a different event in Rio.
However, she is contemplating competing in Tokyo in six years, with an option being the single sculls, in which Great Britain have never won a medal.
She added: "I definitely have the drive to want to do it all again. Rio is pretty unlikely - I'm kind of busy. But a Tokyo 2020 comeback is a really exciting idea."
In three seasons together, between 2010 and 2012, Watkins, who is based in Berkshire, and Grainger won all of their 23 races.