First, you should unpair the watch from the phone, and reset it to factory default settings. To do this, hold the Power button briefly, scroll to Settings, then tap System. This will bring up another screen. Tap "Disconnect & reset". The watch will initialize itself, which will take about 15 minutes. After that, you can try pairing the watch with your phone again.
If that does not help, then this could be caused by some problematic data that is stored on the phone. You should perform the following procedure on your phone:
- Open the Android Wear app on your phone.
- Tap the Settings icon (gear-shaped icon) in the upper-right corner.
- Under "Device settings", tap the name of your watch, then tap "FORGET WATCH".
- Go to the Settings for the Android operating system on your phone.
- Select "Apps" or "Application Manager". You should then see a list of apps.
- Find "Android Wear" in the list, and tap it. You should then see a screen with more details about the Android Wear app.
- Look for two buttons called "CLEAR DATA" and "CLEAR CACHE" on this screen. If you do not see them here, then you might have to tap "Storage" to bring up another screen that has these buttons.
- Tap the "CLEAR CACHE" button. Wait a few seconds for this process to complete.
- Tap the "CLEAR DATA" button. Wait a few seconds for this process to complete.
- Uninstall the Android Wear app from the phone.
- Reboot the phone (usually accomplished by holding the Power button for a few seconds), and when it has finished booting, reinstall the Android Wear app.
After doing the above, open Android Wear, then pairing the watch with your phone.
If the problem persists, then you might also need to clear the cache and data from the Google app and Google Play Services on the phone. This can be accomplished if you perform steps 4-9 above again, but for step 6, select "Google" or "Google Play Services" (instead of "Android Wear").