The league is scheduled to restart on Aug. 2 and organisers said they were "very disappointed" to learn of the Wolfpack's decision.
"Super League Europe and the RFL have been in regular dialogue with the Wolfpack over the past weeks and months regarding the club's ability to take part in the competition," read a statement from Super League, "and firm assurances had been received as recently as last Thursday.
"The club's decision is especially disappointing given the imminent restart of the season."
Williams, the former All Black, is in his first season with the team, which lost its first six matches in Super League before the suspension.
British newspaper The Mirror reported last week that the Wolfpack's seven overseas players — including Williams — have been on visas limiting them to six months a year in Britain, which has now expired because of the pandemic.
Toronto Wolfpack was established in 2017, beginning in English rugby league's third tier. The team has won two promotions in three years.
Toronto said it "fully intends" to field a team in the 2021 season.
The league said a discussion "around the longer-term consequences and the future of the Wolfpack in Super League" will take place soon.