Blues' lock Williams was a controversial selection by the then new All Black coach Steven Hansen for the three-test series against Ireland in June, given the 31-year-old's ordinary form for his struggling Super Rugby franchise.
Williams went under the knife after he aggravated the injury in the narrow second test victory in Christchurch and he hasn't played since.
It means Hansen and fellow selectors Ian Foster and Grant Fox have named three locks - Sam Whitelock, Brodie Retallick and Luke Romano - in the 28-player squad to compete against Argentina, Australia and South Africa, with Williams' absence allowing them to name six loose forwards.
"We had to make a decision on Ali," Hansen said in Auckland yesterday after naming his squad. "We thought maybe he might get the last two [tests] but Doc [Deb Robinson] wasn't as confident as she had been earlier and he's just been re-scanned and he's got a bit of bone bruising in the joint."
There is no doubt the All Blacks are light on locks, with few putting their hands up below the current quartet. Jarrad Hoeata at the Highlanders is probably the next player in the queue, with Craig Clarke understood to be out of the frame despite his inspirational season with the Chiefs.
"Obviously it's a position that we don't have a lot of strength in but at the same time when you say that you've got to temper that," said Hansen, who is backing Williams for the experience his 75 test caps provides.
"Sam Whitelock is a young athlete, Retallick is a young athlete, even though Luke is 26 he is still very young in terms of his professional career so there's three guys there who should be around New Zealand rugby for some time."
Hansen said Williams would still do his rehabilitation as part of the squad, which assembles in Auckland on Thursday before flying out for Sydney and the first test against Australia at Stadium Australia on August 18 a week later. Crusader Romano, who hurt a shoulder in the semifinal defeat by the Chiefs, would be available for the first test, he said.
The squad is a largely predictable, with Liam Messam, who joined the All Blacks for the final test against Ireland in Hamilton as an injury replacement for Victor Vito, one of the six loose forwards. The others are captain Richie McCaw, Kieran Read, Sam Cane, Adam Thomson and Vito.
Hansen said Read, who missed the Crusaders' final two games of the season with a fractured rib, would be considered for Friday's run-out against the Counties and Auckland ITM Cup sides at Pukekohe. The squad will play 20 minutes against both teams at EcoLight Stadium.
The only newcomer is 25-year-old Blues' prop Charlie Faumuina, named for the Ireland tests but unable to play due to a calf injury. Chiefs' 20-year-old Ben Tameifuna, cited for a high tackle in last night's final, drops out, as does wing Zac Guildford. Cory Jane returns from an ankle injury.
Sonny Bill Williams, who is departing for Japan and then the NRL, and Ma'a Nonu are likely to be centre partners in the opening two tests - both against Australia. Conrad Smith, the Hurricanes' second-five who has had recent eye surgery, would likely miss only the first two tests, Hansen said.
Piri Weepu retains his place alongside Aaron Smith, with Hansen saying Tawera Kerr-Barlow of the Chiefs would probably get his chance on the end of year tour as one of three halfbacks.
Hansen, who insisted he was comfortable with the level of preparation his team will have for the first test, also had a ready answer for the Robbie Deans question, as in the challenge of facing his fellow Kiwi coach.
"It's not about Robbie, it's about playing Australia. And any contest against Australia is a big challenge. It's something we love don't we? How many gold medals have they got at the moment?" One, Steve. "So we're beating them at that too."