The roster move was disclosed in the NFL’s Friday transactions.
The Colts’ starting tailback, Ballard suffered a torn anterior cruciate ligament in a practice drill on Thursday.
The 5-foot-8, 195-pound Williams led the Colts in rushing in the preseason, gaining 169 yards on 41 carries. He was one of the Colts’ two seventh-round picks in April. Williams, 22, played at Utah State, rushing for 2,515 yards for the Aggies.