The announcement was made to Redblacks season ticket holders in an email Tuesday morning.
While playing with the Hamilton Tiger-Cats, Williams earned the CFL Rookie of the Year award in 2011 and a CFL all-star berth in 2012.
Williams then left the Tiger-Cats and spent the next two seasons on NFL rosters in New Orleans and Chicago.
A news conference is scheduled for 2 p.m. ET Tuesday.