Team owner and general manager Jerry Jones met with some players Tuesday morning and told them not to bother reporting to training camp Wednesday in San Antonio because they will be cut.
By cutting Williams, the Cowboys will save $5 million against the salary cap because he has been designated as a June 1 cut.
Williams struggled to produce after the Cowboys traded three draft picks to the Detroit Lions at the trade deadline for the receiver in 2009.
Williams, who battled a groin injury during the second half of last season, caught only 37 passes for 530 yards and five touchdowns in 2010. In his three seasons with the Cowboys, Williams totaled 1,324 receiving yards.
After catching 19 passes in his first season, Williams' totals were expected to increase after the Cowboys released Terrell Owens. That didn't happen.
Williams lost his role as the lead receiver in 2009 when Miles Austin -- subbing for an injured Williams -- emerged with a 250-yard, two-touchdown performance at Kansas City.
Williams maintained his role as a starter but didn't get the ball on a consistent basis and had trouble developing a chemistry with quarterback Tony Romo and then-offensive coordinator -- and current head coach -- Jason Garrett.
Garrett spoke to Williams late in the 2010 season about comments the receiver made regarding the offense. Williams said it was a misunderstanding and that the two were fine.
When the Cowboys made the trade for Williams, they gave him a five-year extension worth $45 million, which included more than $20 million in guaranteed money.
Now Williams, who had said that he wanted to retire as a Cowboy, will test the free-agent market.
Calvin Watkins covers the Cowboys for ESPNDallas.com.