Details of the contract, with the deal confirmed by the club, were not yet available. The contract, believed to be a short-term deal, reunites Williams with Cincinnati defensive coordinator Mike Zimmer, who held the same position for five seasons with the Cowboys.
Cincinnati coaches hope the addition of Williams will solve a long-standing problem in the middle of the secondary.
Williams, 28, was the Cowboys first-round pick in the 2002 draft, from Oklahoma.
The seven-year veteran was a fixture in Dallas' interior secondary until his release. He was named to five Pro Bowl teams and one All-Pro squad. During his career with the Cowboys, Williams had 611 tackles, 6 1/2 sacks, 19 interceptions and 56 passes defensed.
Blessed with the instincts of a safety and the hitting power of a linebacker, Williams was often a liability in pass coverage. He was at his best playing close to the line of scrimmage and was an effective defender versus the run. Zimmer knows Williams well and should be able to design a defense that emphasizes his strong points.
Williams had signed a $25 million contract extension in Dallas, which included an $11 million signing bonus. His departure, saved the Cowboys about $2 million in salary-cap room.
Len Pasquarelli is a senior writer for ESPN.com.