The project is listed as “upcoming” and would be a “faithful adaptation”, animated in the art style of the graphic novel.
This rumor comes from Film Buff Online, who received a tip from a reader, forwarding them a marketing survey gauging the reception of potential Warner Bros. projects.
Of the titles that were on this list, a direct-to-video Watchmen animated film was present.
None of this has been confirmed by Warner Bros., but if something like this is in the works, it is most likely in the earliest stages of development.