The Wallabies showed a ruthless streak to score three tries in an 11-minute second half scoring blitz following Wales fullback Leigh Halfpenny's sin-binning in the 50th minute.
With James O'Connor set to collect the bouncing ball close to the Welsh try line, the No.15 tackled the fly half too early.
Halfpenny's departure ignited the tourists as they put on 21 points in a little over ten minutes and an insurmountable 24-6 lead in an entertaining encounter.
O'Connor scored nine points on four of six with the boot in another strong outing at No.10 while inside centre Berrick Barnes and fullback Adam Ashley-Cooper were outstanding.
After trailing 6-3 at halftime and with star backrower David Pocock sidelined with an ankle injury, the Australian forward pack dominated the second half.
The result of scans on Pocock's ankle were expected to be known on Wednesday while NSW Waratahs winger Lachie Turner played on with a fractured left thumb.
But for the locals, it was all about Williams.
The nearly 62,000 fans erupted in Cardiff when Williams skipped over for the 60th and final Test try of his international career with the final play of the match.
It was Williams' sixth try in eight Tests against Australia and made him the most prolific try-scorer against the Wallabies amongst northern hemisphere players. The next best is French legend Serge Blanco.
With chants of "Shane, Shane" ringing out under the Millennium Stadium roof, Williams was joined by his children on the field for an emotional lap of honour.
"I have had the best time of my life," Williams said.
Wales fly half Rhys Priestland opened the scoring with a seventh minute penalty while Williams knocked on his first touch.
O'Connor missed a chance in the 30th minute to level the scores before Lachie Turner went agonisingly close to touching down in the corner.
Barnes produced an inch-perfect cross-field kick for Turner but the winger was ruled by English video referee Geoff Warren to have gone into touch before planting the ball down.
Priestland stretched the lead out to six points before O'Connor reduced it to 6-3 at halftime.
Radike Samo replaced Pocock at the break and the Wallabies started opening up Wales with Halfpenny's time on the sidelines sparking a scoring spree.
A sniping Will Genia snuck over in the 51st minute and not even O'Connor missing a penalty from straight in front in the 57th minute slowed the momentum.
A minute later the young playmaker showed great composure to produce an excellent cut-out pass to put Turner over and Barnes crossed four minutes later off a lovely ball from Samo.
Wales hit back with Priestland rolling his way over the line with 13 minutes to play.
Queensland Reds back Ben Tapuai made his Test debut by coming off the bench in the 77th minute before Williams provided one last moment of magic by evading Barnes.
