The wing wizard, who toured with the Lions in 2005 and 2008, will leave a giant hole in Welsh rugby draws the curtain on his international career following Saturday's clash with Australia.
Williams will continue to dazzle defences on the domestic scene with the Ospreys but Halfpenny reckons Wales can cope with the wing's departure.
"Shane has been a great servant for Welsh rugby - a legend of the game," said Halfpenny.
"He will leave a big hole and they are massive boots to fill. But there are a lot of youngsters coming through, people like Alex Cuthbert and Liam Williams, which is promising for us.
"The academy system has been immense for Welsh rugby and the future is looking good - there is a lot of talent coming through."
Halfpenny is cut from a similar cloth to Williams and is a rare diminutive star in the modern game. Having started his Test career on the wing the Cardiff Blues star made a successful switch to fullback during the World Cup but admits he owes a huge amount to his international mentor.
"Shane was one of my idols growing up and I always looked up to him," said Halfpenny.
"Just watching a video of his tries this week was pretty special - he's had a fantastic career.
"He's been a massive influence on me from day one. He has helped me learning the calls, dealing with high balls and in both attack and defence."
Now Halfpenny is determined to build on Wales' best World Cup finish in 24-years by gaining revenge for the 21-18 Bronze Final defeat at the hands of the Wallabies.
"Obviously, we would love to give Shane a great send-off, but at the end of the day it is Test rugby," added Halfpenny.
"We know Australia well from out in New Zealand and we were bitterly disappointed to lose that bronze medal game - we feel we owe them one.
"Building on the World Cup is definitely our aim now. It's an exciting time for us. We're a young side full of excellent talent and it's a big occasion for us."