In front of a distinguished audience that included Lions coach Ian McGeechan, and Tour manager Gerald Davies, Williams was announced as the Pat Marshall Memorial Award winner.
The award was presented by the Rugby Writers Club, in honour of his outstanding achievements in 2008.
In a remarkable season. Williams helped his country to a glorious Grand-Slam, and became Wales' leading try scorer in the process.
His match-winning try against France was his 41st international score, and saw him overtake Gareth Thomas at the top of the try-scoring table.
Williams' efforts were recognised by tournament sponsors RBS when he was named as man of the tournament.
Just weeks after lifting the Six Nations trophy, the Swansea-born player helped the Ospreys to raise the EDF Cup as his international form was transferred to regional level.
Success on the park lead to a string of accolades, and Williams was honoured in November with the ultimate recognition when he was announced as the IRB World Player of the Year.
Not only did Williams make an impression on rugby's great and good, he captured the hearts of the public.
They voted for Williams ahead of Olympic cycling gold medallist Nicole Cooke and undefeated world champion boxer Joe Calzaghe as BBC Wales Sports Personality of the Year.
However, the Ospreys man has been sidelined with a shoulder injury since damaging it in the Heineken Cup victory over Benetton Treviso. He is expected to return in time to help Wales defend their Six Nations title in February, and add to his career total of 44 tries in 61 appearances for his country.