The versatile Williams – who can play at full back, wing or fly half – was selected for the Wales 2014 tour to South Africa as well as previously playing in the Wales under 20s team that finished runners up in the 2013 Junior World Championship.
After making 55 appearances for the Scarlets, scoring 81 points Williams crossed the Severn Bridge to join Bristol and has made 20 appearances, scoring 9 tries for the South West club in the last season and a half.
“We’re delighted to bring Jordan back to Welsh rugby and to the Dragons– he’s an exciting young full back with all the attacking attributes to get people on their feet,” Head Coach Bernard Jackman said.
“Jordan is a talented young player, he’s a quick elusive runner and is dangerous in broken play.
“At 24, he is still a young man with time to further develop his skills, but we’re confident he will be an exciting addition to our back division who will thrive in the brand of rugby we’re developing at the Dragons.”
Williams added: “I’m excited to be joining the Dragons next season. I’ve enjoyed my time at Bristol but it’s time for a new challenge and I’m looking forward to playing in Wales again and working with Bernard.
“The Dragons have lots of talented young Welsh players and as a player you get a sense that something exciting is building there so I can’t wait to get started next season.”