The experienced midfield player missed the November internationals with a hamstring tear and sat out the opening two rounds of the Six Nations with an ankle problem.
Better news for coach Warren Gatland has been the return to training of fullback Leigh Halfpenny, flyhalf Rhys Patchell, and prop Leon Brown.
"Scott Williams has been released from the 2019 Six Nations squad to continue rehabilitation of his back injury at his region," a statement from Welsh Rugby said on Wednesday.
"It is felt that his injury will preclude him from taking a competitive part in the competition."
Williams, who has 57 caps, watched from the sidelines as Wales opened their Six Nations campaign with a 24-19 victory over France in Paris and a 26-15 success at home to Italy.
They are next in action against England in Cardiff in what is a potential title decider on Feb. 23.