The 27-year-old fullback, son of All Blacks great Bryan Williams, can also play on the wing.
"He is an exciting player, he'll add power to our three-quarters and fit perfectly with Matt Tait and Mark Cueto," Sale coach, former All Black Mike Brewer said, the BBC reported.
Williams was named Auckland's player of the year in 2009.
Williams is the brother of Samoa international Gavin and has also played for Highlanders in Super 14.