The 34-year-old No.8 arrived at the Arms Park ahead of the 2016-17 season and has provided ball-carrying ability and a menacing presence at the breakdown
Williams has made 35 appearances to date, scoring seven tries, and is looking forward to contributing further to the Cardiff Blues cause.
He said: “The body is still loving it, my mind is still loving it and my girls and my wife absolutely love this place so I’m really happy to extend my stay.
“I’m really enjoying my rugby at the moment and my family can see that – I am fresh and happy here.
“We are building a really competitive squad and we have some young guys coming through who have a huge amount of potential. While the body is good I will keep trucking along with them.”
Williams has proven to be an equally influential figure off the pitch and Cardiff Blues chief executive Richard Holland was pleased to maintain his leadership.
He said: “Nick has been a great addition to Cardiff Blues and he’s really demonstrated his quality in recent weeks.
“Not only is he a top quality rugby player but he’s a good man, a role model and a leader both on and off the pitch.
“With so many youngsters in the pack, it is great to have that experience and know how, and he will be a key figure for us as the region moves forward.”
Dragons have also signed a new player with Worcester Warriors forward Huw Taylor joining the region next summer on a two-year deal.
The 21-year-old, who is Welsh qualified, can play in the second row and back row and has impressed Dragons coaches through his consistent performances for the Warriors.
Taylor has age-grade international honours through England U17s, U18s, U20s and was part of the team that became champions after beating Ireland in the final of World Rugby U20s in 2016.
Taylor said: “I am very excited to be joining the Dragons at this time. They have a youthful team there with great potential to develop, and I am looking forward to being an integral part of that change.
“It appears to be an up and coming environment and I am excited to get stuck in next season.”
