For Williams, it is the end of an 11-year association with the Guinness PRO14 champions, and he was part of the Scarlets side that lifted the trophy in Dublin last season.
The 27-year-old has made 124 appearances for the Scarlets, scoring 21 tries, and has formed a potent midfield partnership with Wales teammate Jonathan Davies.
He admitted it had been a tough decision to leave Parc y Scarlets but was relishing the chance to play for the Ospreys.
He said: “I hope it goes without saying that this has not been an easy decision for me, but ultimately, I feel it is a move that is the right option for me at this time in my career.
“I’ve loved every minute of my 11 years at the Scarlets. I will always be grateful to the board, Wayne (Pivac) and his team, and all associated with the club, for their support over those years.
“I’m now looking forward to a fresh challenge at the Ospreys. I’m excited about their mid and long-term plans and goals, and my role there as a senior player. I hope it will allow me to continue improving and developing, both as a player and as a person, which is a great motivator for me.
“Once this weekend and the international period are complete, I’ll be back at the Scarlets, determined to positively contribute to achieving our goals for this season.”
Meanwhile the Scarlets will have a like-for-like replacement in Fonotia, the Samoa international who arrived at the Liberty Stadium a year ago.
He has gone on to make 29 appearances for the Ospreys and is already looking forward to the chance to play in Llanelli.
He said: “I’m very excited to be joining the Scarlets next season and playing again with a few familiar faces. They’ve had a very successful couple of years playing some good rugby and hopefully I can help develop that further.
“However, my priority now and for the remainder of the season, is to help improve the league position at the Ospreys and make sure the Ospreys climb up the conference and finish the season successfully.”
Guinness PRO14 Final 2018 Ticket Information: Fans can save up to 20% on selected tickets, and prices start at just €30 for adults and €5 for children, and can be booked via www.ticketmaster.ie