Barring a Super Bowl run, Williams' season is likely over.
Williams had been downgraded to out for Saturday's wild-card playoff game at the Jacksonville Jaguars. The Chargers said Williams would remain in Los Angeles to continue receiving treatment.
The sixth-year receiver had not practiced all week after being injured in the regular-season finale against the Denver Broncos, a game that did not affect the Chargers' playoff position.
An initial X-ray on Williams was negative, and a first MRI also appeared negative. However, Williams was not progressing as expected on an initial diagnosis of a back contusion, leading to an additional MRI and the fracture diagnosis.
Chargers coach Brandon Staley on Thursday defended his decision to play his starters against the Broncos.
"It's difficult to decide who plays and who doesn't and who is more valuable than the rest," Staley said. "What you are trying to do is set a standard for your program about how you do things. That is what I believe in, and I didn't want anybody to get hurt in [the game], regardless of their status, because everybody is important."
A 2017 first-round draft pick, Williams has caught 63 passes for a team-high 895 yards and four touchdowns this season. He missed four games with a high ankle sprain, and he paired up with Keenan Allen in only four complete games in 2022. The Chargers were 4-0 in those contests.
Joshua Palmer, who is second on the team in receptions (72) and yards (769), will start in place of Williams.
Williams has dealt with back issues throughout his career and missed the first five games of his rookie season in 2017 because of a back injury.
The fifth-seeded Chargers (10-7) are making their first playoff appearance since 2018 and are facing the Jaguars in the postseason for the first time.
Information from The Associated Press was used in this report.