The 25-year-old loosehead is in hospital after being diagnosed with discitis, an infection in one of the discs in his spine, the Crusaders said in a statement on Monday.
His absence is a blow for the defending champions, who are sixth on the table after a slow start.
"His return to rugby beyond (the season) remains unclear and will be guided by further medical advice," the Crusaders said.
Williams said he had a sore back for a couple of weeks before going in to hospital for scans.
"I’m feeling gutted, but I’m also grateful that the news isn't as bad as what it could be," he said.
"I’ve been told I’m going to make a 100 percent recovery, so I’m thankful for that."
The All Blacks start the test season in July with matches against France, Italy and Ireland as part of the inaugural Nations Championship.
