Williams had been linked to a move to a number of clubs following the World Cup, including a possible return to Toulon in France.
However the talented former rugby league internationals has now agreed a new 12-month deal with the New Zealand Rugby Union - with Williams opting to switch to the Chiefs.
New Chiefs coach Dave Rennie said: "We're rapt Sonny's joining the Chiefs.
"He had a very good World Cup and his professionalism and work ethic will have a great influence on what is a very young team."
NZRU general manager Neil Sorensen welcomed added: "We're delighted that Sonny has chosen to continue playing his rugby in New Zealand next year.
"He was exciting to watch in Super Rugby this year, and he played an important role in the spectacular Rugby World Cup-winning All Blacks side.
"He's a special player who creates some real excitement and interest in the game with his style of rugby. We're looking forward to seeing him create some more excitement in a Chiefs, as well as an All Blacks, jersey next year."
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The entire All Blacks apparel line has been updated for 2013/14. Check out the New Zealand All Blacks polo.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Gilbert Blitz 8S rugby cleat is a great cleat at a great price of $69.99. Get a new pair of cleats today.
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Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
The All Blacks Performance t-shirt is black with hints of blue from the training jersey. Very Cool.
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The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.