He was due to come out of contract at the end of the month but following a meeting of PRB, it has been agreed that 35-year-old will stay at the Blues for one more season.
Williams has been an influential figure since joining the Blues three years ago with his powerful ball carrying a vital asset to Jon Mulvihill’s side.
“We are thrilled to be able to retain the services of Nick, a player who has become such a key figure within our environment,” said Cardiff Blues chief executive Richard Holland.
“Anyone who has watched Cardiff Blues this season, and most recently Judgement Day, will have seen he is still producing the goods on the pitch but on top of that, he brings an enormous cultural benefit to the entire environment. He will now continue to play a key role in mentoring and developing young Welsh talent.
“We would like to thank PRB for their support throughout the process, which has culminated with a positive outcome for Cardiff Blues and our strategy to develop young talent from within, which is ultimately for the betterment of Welsh rugby as a whole.
“Nick embodies all of the values we want at Cardiff Blues and this mentoring role has the potential to become something more long-term.”
Williams has made 66 appearances during his three seasons since joining the region from Ulster, scoring 12 tries in the process.
He has recently set down roots in Barry, with his young family and is delighted to sign on for one year as he continues to impart his vast experience.
“I’m very happy and blessed to be able to go again,” said Williams.
“I spoke to my family and they were all supportive, so I told John in November-time that I was keen to stick around. The body feels fresh, mentally I feel good and it all seems to be working for us so I’m happy to get another year.
“I really rate the young boys in the squad. We have a good group, who have come through together and are very tight. Hopefully I can help them develop and if they stick together the future is really bright both for Cardiff Blues and the individuals.”