I thought I'd share a few fixes I found because I know someone else has this problem.
1. Open "Keychain Access"
2. In "View", enable "Show Invisible Items"
3. Search for "Auto Unlock"
4. You should see a whole bunch of application passwords for "Auto Unlock: XXXX's ..."
5. Select all records and delete (this will reset/disable auto unlock on other Macs if you use multiple Macs)
6. Whilst still in "Keychain Access", search for "AutoUnlock" (no space)
7. There should be 4 entries for "tlk" "tlk-nonsync" "classA" "classC"
8. Select 4 records and delete (don't worry if they re-appear, the system repairs this automatically)
9. Open "Finder" and navigate to "(User Name)/Library/Sharing/AutoUnlock"
10. There should be two files "ltk.plist" and "pairing-records.plist"
11. Delete both files
12. Open "System Preferences" and try enabling auto unlock. You may need to enable it twice, the first attempt will fail.
I would love to take credit for it but someone named stoska992 posted this on the Apple support forums.
Edit: The above fix worked for half a day then stopped working. The unlock with Apple Watch box was unchecked. The fix below credit to wilberforce finally worked for me. Since some people say the above fix kept working for them I'm going to leave it.
Plug in hard wired (Non Bluetooth) keyboard and mouse.
Uncheck "Use your Apple Watch to unlock..." For me this couldn't be checked
Option-Shift-Click Bluetooth icon in menu bar
Debug
Factory reset all connected Apple devices
For me the first time I checked "Use your Apple Watch to unlock..." popped up with an error but the second time it worked.
People in other posts say Apple is working on a fix for this but in the mean time hopefully one of these works for you
1. Open "Keychain Access"
2. In "View", enable "Show Invisible Items"
3. Search for "Auto Unlock"
4. You should see a whole bunch of application passwords for "Auto Unlock: XXXX's ..."
5. Select all records and delete (this will reset/disable auto unlock on other Macs if you use multiple Macs)
6. Whilst still in "Keychain Access", search for "AutoUnlock" (no space)
7. There should be 4 entries for "tlk" "tlk-nonsync" "classA" "classC"
8. Select 4 records and delete (don't worry if they re-appear, the system repairs this automatically)
9. Open "Finder" and navigate to "(User Name)/Library/Sharing/AutoUnlock"
10. There should be two files "ltk.plist" and "pairing-records.plist"
11. Delete both files
12. Open "System Preferences" and try enabling auto unlock. You may need to enable it twice, the first attempt will fail.
I would love to take credit for it but someone named stoska992 posted this on the Apple support forums.
Edit: The above fix worked for half a day then stopped working. The unlock with Apple Watch box was unchecked. The fix below credit to wilberforce finally worked for me. Since some people say the above fix kept working for them I'm going to leave it.
Plug in hard wired (Non Bluetooth) keyboard and mouse.
Uncheck "Use your Apple Watch to unlock..." For me this couldn't be checked
Option-Shift-Click Bluetooth icon in menu bar
Debug
Factory reset all connected Apple devices
For me the first time I checked "Use your Apple Watch to unlock..." popped up with an error but the second time it worked.
People in other posts say Apple is working on a fix for this but in the mean time hopefully one of these works for you
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