diff --git a/src/transformers/generation/utils.py b/src/transformers/generation/utils.py
index e3657550d0e7de..1e94e9d1ef875e 100644
--- a/src/transformers/generation/utils.py
+++ b/src/transformers/generation/utils.py
@@ -1029,10 +1029,6 @@ def _get_logits_processor(
                 "You have explicitly specified `forced_decoder_ids`. Please remove the `forced_decoder_ids` argument "
                 "in favour of `input_ids` or `decoder_input_ids` respectively.",
             )
-        if generation_config.watermarking_config is not None:
-            processors.append(
-                generation_config.watermarking_config.construct_processor(self.config.vocab_size, device)
-            )
 
         # TODO (joao): find a strategy to specify the order of the processors
         processors = self._merge_criteria_processor_list(processors, logits_processor)
@@ -1085,6 +1081,12 @@ def _get_logits_processor(
                     )
                 )
 
+        # Watermarking should be after all logits processing is finished (see #34630)
+        if generation_config.watermarking_config is not None:
+            processors.append(
+                generation_config.watermarking_config.construct_processor(self.config.vocab_size, device)
+            )
+
         # `LogitNormalization` should always be the last logit processor, when present
         if generation_config.renormalize_logits is True:
             processors.append(LogitNormalization())