The 29-year-old had been linked with a host of clubs as he entered the final year of his old deal, but the former Stockport County man has now committed his future to the Liberty Stadium until 2018.
The Wales centre-back will now join his team-mates on Sunday in travelling to the United States for the club's pre-season tour and is pleased to have the matter sorted.
He told the club's official website: "I'm delighted to sign a new contract at Swansea City.
"I've enjoyed fantastic success at this club and I want to keep helping Swansea City progress."
Williams joined Swansea from Stockport in May 2008 and has played for the club in the top three divisions of English football.
He captained their successful League Cup campaign in the 2012-13 season and has made over 250 appearances for the club.
