The All Blacks centre was handed the suspension for his second test send-off against the British and Irish Lions last 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 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.
Two pre-season Counties Manukau matches, one against North Harbour and one an inter-squad match, were presented by NZ Rugby to the World Rugby judicial committee as completing the four-match ban.
But the disciplinary committee ruled the inter-squad "game of three halves" match did not meet the grade as a proper match.
The panel, which included two former Wallabies, said the match between the All Blacks and the Counties and Taranaki provinces was not "meaningful."
In a statement last Friday, New Zealand Rugby said it would ask World Rugby's appeals committee to review the decision which will see Williams complete his suspension on August 20, the day after the Bledisloe Cup test in Sydney.
"Sonny Bill Williams has appealed the World Rugby judicial committee's decision not to include the All Blacks match on August 11 [a split game of 40 minutes each against Counties Manukau and Taranaki] in the four-week suspension given to Williams following a hearing into the red card he received in the second test against the touring British and Irish Lions," the statement said.
"As the matter will now be decided by an appeal committee, no further comment will be made at this time."
- additional reporting: NZN