Williams did not even receive a place on the New Zealand bench as coach Graham Henry named his full-strength team to play the Wallabies at Suncorp Stadium.
The former league star started in the 18-5 loss to South Africa in Port Elizabeth last weekend, but Ma'a Nonu has been preferred at second five-eighths against Australia.
A regular reserve before the Springboks test, Williams' lack of utility value has ultimately cost him a place on the bench in the last outing before the World Cup kicks off on September 9.
The 26-year-old had been in outstanding form for the Crusaders in his debut Super rugby season but Nonu has taken a stranglehold of the No 12 jersey after his dominant Auckland display in the 30-14 win over the Wallabies three weeks ago.
"Sonny Bill's challenge is, I think, he's competing against the best No 12 in the world and that's great," Henry said yesterday.
"Quite frankly it's a different experience for Sonny Bill.
"He's always been, and rightly so, the top person in that position in the teams he's played in, whether it be rugby league or rugby union. Now he's in a situation in the All Blacks where there's high competition for places and he's not guaranteed a run-on spot."
Nonu will equal Walter Little as New Zealand's most-capped second five-eighths, lining up in his 45th appearance.
Only two All Black starters remain from the Port Elizabeth defeat, with veteran prop Tony Woodcock chosen to continue his injury comeback and flanker Adam Thomson moving from No 7 to No 6.
The starting team contains 10 of the players who smashed the Wallabies early at Eden Park, racking up a 17-0 lead in the opening 28 minutes.
Cory Jane and Zac Guildford have been given first crack at cementing wing places before the World Cup while 97-test fullback Mils Muliaina has been given the nod ahead of Israel Dagg, who was in scintillating form against the Springboks.
Rising lock Sam Whitelock beat veteran Ali Williams to a place in the second-row beside Brad Thorn, while Piri Weepu was preferred to Jimmy Cowan at halfback.
