The two-tour Lion is out of contract in the summer. But after his Ospreys, Wales and Lions teammate James Hook announced he will ply his trade in Perpignan next year, Williams has revealed he will stay at the Welsh region.
"It's just a case of me putting pen to paper. I'm looking to stay at the Ospreys for two more years," said Wales' record try scorer.
"With the injury and not being available at training, it's just been put on the back burner.
But I'm still enjoying myself at the Ospreys, I still want to play for them and they want to re-sign me. It's just a case of signing it."
Williams was the fourth Lion linked with a move away from the Liberty Stadium following the departures of Gavin Henson and James Hook, while Lee Byrne has been linked to Clermont Auvergne.
But Williams has given Welsh rugby a significant tonic by confirming he intends to see out his career at the Swansea-based region.
And after returning from a dislocated shoulder against Toulon last weekend, Wales' record try-scorer is ready to thrill against Martin Johnson's men as he enters his final year of international rugby.
"It was always touch and go and I'm lucky to be here - I'm three weeks ahead of schedule," added 33-year-old Williams.
"This is probably my last year as an international and I need to make sure I'm at my best.
"Playing England's massive; the Six Nations is the best tournament you can play in. It has the best atmosphere, the best grounds and everyone waits 12 months before going at it all guns blazing.
"It's a massive game for us with all the tradition and the love hate relationship with England.
"I want to get involved in as much rugby as possible if that means finishing off tries so be it. I like to get my hands on the ball and if I can put boys through holes then great. But it's about more than just one player, we all have to perform."