And in further good news for the returning Wales head coach, Ospreys hooker Dewi Lake is included among the replacements for what will be his first outing since injuring his shoulder against Dragons before the Autumn Nations Series.
British & Irish Lions full back Williams has been out of action since suffering a shoulder injury on his Blue & Blacks debut in September and returns for his second home game in a battle between the top two teams in Wales.
Both teams were regional derby winners on Boxing Day – the Ospreys beat Scarlets 34-14 and Cardiff won 29-24 at Rodney Parade against Dragons – and come into the game in good form.
Cardiff have risen to fifth in the URC table, while the Ospreys, current holders of the Welsh Shield, are eight points behind in 13th.
Williams is joined in the back three by fellow Lion, Josh Adams, who has recovered from the knock that forced him to leave the field on Monday. Owen Lane is on the other wing.
The only other change in the back line sees Jarrod Evans start at No 10 ahead of Rhys Priestland, who came off with an injury at Rodney Parade.
Director of rugby Dai Young has injury concerns over his top two tight heads props, Dmitri Arhip and Dillon Lewis, so Will Davies-King gets his first league start in the No3 jersey.
“It’s great to head back to Cardiff Arms Park for what is set to be a sold-out Welsh derby. These are the days you play or coach for and there has certainly been a buzz around training this week,” said Young.
“We go into the game on the back of a bonus-point victory over the Dragons, in a game which was a brilliant advert for Welsh rugby, but while we were happy with the result, we know our performance must improve and that has been the focus this week.
“The Ospreys had the better of us last season and boast one of the very best packs in Europe. We simply have to match that physicality and set-piece.
“But the boys are hugely motivated and focused on the challenge ahead. It all makes for an exciting afternoon with two teams in good form going head-to-head.”
It will be the first of two home derby matches for Cardiff, who welcome Scarlets to the Welsh capital next weekend.
The Ospreys have recalled Keelan Giles to play on the wing, put Jack Walsh in at full back and brought Alun Wyn Jones into the starting XV in a swap with Rhys Davies, who drops to the bench. The is also a switch across the front row with the bench against the Scarlets taking over at the start.
“Cardiff improved massively from where they were and I’m sure they’re pleased with how they going. We know we’ve performed well against them in recent times, certainly since I’ve been here, but it’s going to be a tough ask,” said Ospreys head coach Toby Booth.
Cardiff: Liam Williams; Owen Lane, Rey Lee-Lo, Ben Thomas, Josh Adams; Jarrod Evans, Tomos Williams; Rhys Carré, Liam Belcher, Will Davies-King, Lopeti Timani, Seb Davies, Josh Turnbull (captain), Thomas Young, Taulupe Faletau
Reps: Kirby Myhill, Corey Domachowski, Keiron Assiratti, Teddy Williams, Ellis Jenkins, James Ratti, Lloyd Williams, Mason Grady
Ospreys: Jack Walsh; Alex Cuthbert, Michael Collins, Keiran Williams, Keelan Giles; Owen Williams, Rhys Webb; Gareth Thomas, Sam Parry, Tom Botha, Adam Beard, Alun Wyn Jones, Jac Morgan, Justin Tipuric (captain), Ethan Roots
Reps: Dewi Lake, Nicky Smith, Tomas Francis, Rhys Davies, Morgan Morris, Reuben Morgan-Williams, Joe Hawkins, Cai Evans