Williams, who provided bench cover for Mike Phillips during this season's successful Six Nations campaign, was hurt during Cardiff Blues' RaboDirect Pro12 defeat against the Ospreys at the Millennium Stadium last weekend.
"Cardiff Blues can confirm that scrum-half Lloyd Williams will be out of action for approximately four weeks following a knee injury suffered against the Ospreys over the weekend," the club announced on their official website.
The 23-year-old suffered grade two medial ligament damage, with a possibility that he could return to action against Ulster on May 3.
With Phillips set for a place in the British and Irish Lions squad to tour Australia this summer, Williams is favourite to wear Wales' number nine shirt against Japan in Osaka on June 8 and Tokyo seven days later.
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