Gray, 27, and Watters, 36, wed before 45 guests on a cliff overlooking the ocean. After the ceremony, "They walked through the city and townspeople were opening their windows and cheering for them," Gray's manager, Lisa Braude, tells PEOPLE.
The couple have been together for two years. They got engaged on Valentine's Day when Watters proposed with an antique diamond engagement ring in a platinum setting.
A fan favorite on American Idol in 2002, Gray has ventured into acting - she had a recurring role on Boston Legal in 2003, appeared in the 2005 indie film The Gospel and played a waitress on NBC's Las Vegas in March.
In 2004 she released an album, The Dreamer. Since his stint with Color Me Badd, which had a hit with "I Wanna Sex You Up," Watters has worked with partner Louis Biancaniello as a writer and producer for artists including Jessica Simpson (he co-wrote her song "A Public Affair"), Celine Dion and Kelly Clarkson. He also co-wrote, produced and arranged several songs on The Dreamer.
The newlyweds are currently honeymooning in Italy. (source)