After initially being named on the bench for Saturday's test against South Africa, he's now been replaced in the squad by Jack Goodhue.
Williams has been battling illness and won't be fit for the clash.
It's another blow for the big midfielder who has had another tough year with injury; he broke a wrist in Cape Town while touring with the Blues this season and had minor knee surgery which ruled him out of the first two tests against France.
And then, when he got his chance against the French in Dunedin in late June, he injured a shoulder which has ruled him out until now. His next opportunity to put the black jersey on will be against Argentina at the end of the month.
With Goodhue now on the bench and Ngani Laumape out with a knee injury, the starting midfield at Westpac Stadium consists of Ryan Crotty, back from the concussion he suffered against the Wallabies in Sydney on August 18, and Anton Lienert-Brown, who has been superb off the bench in the last three tests.
Lienert-Brown will likely lose the No 13 jersey to Crotty once Williams returns to full match fitness but he deserves his start because he has been performing at a consistently high level. Goodhue, after starting the two tests against Australia and last week's against Argentina in Nelson, has initially been given a rest before Williams was ruled out.
SMITH SHIFTED TO WING
There is a minor surprise at fullback, with Jordie Barrett picked in the No 15 jersey and Ben Smith shifted to the right wing, meaning there is no place for Waisake Naholo. Rieko Ioane returns to the left wing after recovering from a hamstring strain picked up in Sydney.
Aaron Smith and Beauden Barrett, the All Blacks' top halves pairing, are back, and the forward pack also virtually picks itself, with Scott Barrett replacing the injured Brodie Retallick.
Patrick Tuipulotu has followed his hat-trick heroics for Auckland with a place on the bench, a return to the black jersey for the first time since he started against Wales in Cardiff last November. Liam Coltman, rather than Nathan Harris, provides hooker cover on the bench.
"We've had a good week's preparation here in the capital focusing on what we need to bring to the game through our skill sets, the intensity of our play and our energy," All Blacks coach Steve Hansen said.
"We know that we'll have to be at our very best in all these areas to counter an opposition we know will be desperate following their back-to-back losses.
"That means we'll have to respond with a quality performance and a real hunger to be better. You just have to look at our last encounter in Cape Town to understand what kind of beast we will be facing."
All Blacks team to play South Africa at Westpac Stadium on Saturday, kick-off 7.35pm is:
15. Jordie Barrett
14. Ben Smith
13. Anton Lienert-Brown
12. Ryan Crotty
11. Rieko Ioane
10. Beauden Barrett
9. Aaron Smith
8. Kieran Read
7. Sam Cane
6. Liam Squire
5. Scott Barrett
4. Sam Whitelock
3. Owen Franks
2. Codie Taylor
1. Karl Tu'inukuafe
Reserves: Liam Coltman, Tim Perry, Ofa Tuungafasi, Patrick Tuipulotu, Ardie Savea, TJ Perenara, Jack Goodhue, Damian McKenzie.