The Saracens back sustained the injury during Wales' 13-6 victory over Georgia last weekend and has now been released from the squad.
The absence of the 26-year-old will come as a major blow to Wales, who were already without center Jonathan Davies due to a foot injury.
Davies picked up his injury in Wales' loss to Australia earlier this month and could miss the rest of the season as a result.
Cardiff Blues wing Alex Cuthbert will also miss out this weekend due to a calf injury.
"Liam Williams and Alex Cuthbert have been released from the Wales squad due to injury," the Welsh Rugby Union said in a statement.
"Liam Williams suffered an abdominal injury and Alex Cuthbert a calf injury.
"At this stage, no time frame for recovery has been set for either player, and they have been released back to their respective club/region."