Watts, who was a judge at the annual Tropfest event in Sydney, started crying when organizers honored the late Ledger with a video montage of his career.
King Kong star Watts dated Ledger for two years after meeting him on the set of Ned Kelly in 2002.
The 28-year-old actor was found dead in his New York apartment last month. Toxicology results revealed he was killed by an accidental overdose of prescribed medications.
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