It was originally the wand of Watoomb, but when he eventually decided to retire from his mystical affairs he had Dr. Strange and Cyrus Black duel for the right to possess it. Doctor Strange was victorious but only received half the wand, while the other half was stolen by Xandu (who eventually gained the other half).
Its current whereabouts are unknown, although it is believed to either be in the possession of Xandu, Hoggoth or destroyed.
The Wand of Watoomb can grant such powers as shielding against other mystical attacks, and energy absorbed can be used to perform a variety of effects including healing the wielder, unleashing a concussive blast or erecting a defensive barrier. Also it can be used to open portals to other dimensions, and grants the ability for one to scry any person, place or thing they are familiar with.