The team released the fifth-year player in a one-sentence statement Monday. The Bills paved the way for Williams' departure by placing him on waived-injured two weeks ago.
After going unclaimed, Williams had to recover from a calf injury before the Bills were allowed to cut him.
The decision means the Bills won't have to pay the final four years of his contract, including the $5.2 million base salary he's due to next season.
The Bills gave up a sixth-round draft pick to acquire the Buffalo native in a trade with Tampa Bay in April.
Williams was inactive in four of his final eight games. He finished with eight catches for 142 yards and a touchdown.
AP NFL website: www.pro32.ap.org and www.twitter.com/AP-NFL