Williams was appealing the four-match ban from the Lions series that rules him out of the first Bledisloe Cup clash against the Wallabies.
The All Blacks centre was handed the suspension for his second Test send-off against the British & Irish Lions earlier this month.
Williams became the first All Black in 50 years to be sent off in a Test when he was red-carded for a shoulder charge on Lions winger Anthony Watson early in the 24-21 loss in Wellington.
He missed the drawn third Test with the Lions, and the Blues' final Super Rugby match against the Sunwolves.