Watzke admitted he had been irritated by the recent behaviour of Germany's biggest club who last week signed Dortmund's Mario Gotze.
"I have always spoken about Bayern with great respect and admiration. But I must say now that things have cooled off a little," Watzke told reporters. "There have been a couple of irritations recently."
Watzke said there was still a working relationship between the clubs and added: "Everything should go off in a fair, sporting manner on Saturday but there will not be hugs all around like before.
"Why should we act as if everything is hunky-dory?" added Watzke, who has been responsible for Dortmund's financial renaissance after the club appeared on the brink of collapse in 2005.
"There won't be any lunch with Bayern, just a handshake," he said.
Dortmund have won the Bundesliga in the last two seasons and also beat Bayern in last year's Cup final.
Dortmund's Jurgen Klopp said Bayern were spending their way to success and were imitating other teams "a bit like what the Chinese do in industry."
