It can be used to water saplings that are grown in a plant pot, negating the constant need to refill the watering can with a bucket of water or another water source. Flowers and allotments can also be watered to negate chances of disease for that particular growth stage, and a magic watering can is about twice as fast as a normal watering can when watering tree saplings. It can also be used to plant items in Player-owned houses.
If a player has a normal watering can and a magic watering can in their inventory and attempts to store one with the leprechaun, only the magic one will be shown for storage.
It was previously possible to get more than one magic watering can by storing one in a Tool Leprechaun and then asking the Fairy Queen for a replacement. Anyone who had obtained more than one magic watering can before this bug was fixed still has the extra(s) unless they destroyed them.
Though it clearly has a different look from the old watering can in the inventory, the animation that happens when players use it makes it look the same.
Despite the fact that it is a bottomless source of water, it cannot be used to fill buckets, waterskins, or other similar items; however, it can fill other watering cans.