And Wales coach Mike Ruddock has confirmed that Lions scrum-half Dwayne Peel is "highly unlikely" to feature in the All Blacks clash.
Cardiff Blues forward Williams is mourning the death of his mother, and he is with his family this week ahead of the funeral on Friday.
"Our thoughts and our hearts are with Martyn and his family," said Ruddock.
With Williams out of contention, Ruddock looks likely to field Colin Charvis in the openside flanker position, with Jonathan Thomas joining the back row alongside Charvis and Michael Owen.
Peel's probable absence is a huge blow, especially that Ruddock is already without injured Lions Gavin Henson, Tom Shanklin, Ryan Jones and Gethin Jenkins.
"Dwayne will have another check, but it is highly unlikely he will be in the selection mix," Ruddock added.
"He had a reaction when he trained last week, and it is just one of those things."
While Peel battles to recover from an ankle problem - Newport Gwent Dragons scrum-half Gareth Cooper is favourite to replace him - Ruddock remains in positive mood as Wales target a first victory over New Zealand since 1953.
"We are very optimistic and upbeat as a management team. We are very focused and up for the challenge in what is going to be a full-on occasion," he said.
"We've got to rise to the challenge and step up really quickly. We will take confidence from winning eight games on the trot, and the fact we pushed New Zealand close last year and we are playing in front of 74,000 people in Cardiff."