The steel Jaeger-Lecoultre "Reverso" is the star offering at Sunday's sale, the Antiquorum auction house said.
The "Reverso" is a classic model in which the dial can be flipped to protect the glass front from shocks while offering a solid case.
"We are honoured to present General Douglas MacArthur's historic Jaeger LeCoultre Reverso," said Evan Zimmermann, the head of Antiquorum.
"It represents a unique opportunity for collectors to acquire an important piece of world history that belonged to one of the great American military heroes of all time."
Raised in a military family, MacArthur was chief of staff of the US army in the 1930s and was called on to defend the Philippines against the Japanese during the Second World War.
Although he was forced to flee to Australia, he fulfilled a promise to return to the Philippines and officially accepted Japan's surrender on September 2nd 1945.
The watch, made in 1937, was bought in Geneva and is being put up for sale by his direct descendants.
MacArthur's initials are engraved on its back.
The model in question — a rectangular 23 mm X 38 mm watch — is still being manufactured today.
"For this kind of watch from that period, a conservative estimate ranges from between 5,000 and 10,000 Swiss francs ($5.470 to $10,936), but given the historical interest, the estimate for the watch being offered on Sunday has been fixed at between 10,000 and 20,000 Swiss francs," an Antiquorum expert said.
"Let's see what the auction fetches," he added.