Wales coach Steve Hansen as confirmed his final 30-player squad after originally naming four hookers as he waited for fitness reports.
Cardiff Blues hooker Williams still has a hamstring injury that rules him out of contention, Robin McBryde (Llanelli Scarlets), Huw Bennett (Neath-Swansea Ospreys) and Mefin Davies (Celtic Warriors) are the trio of hookers who will make the trip Down Under for Pool D matches against Canada, Tonga, Italy and New Zealand.
'Gareth pulled a hamstring yesterday and won't be fit to play for four weeks,' said Hansen. 'Unfortunately for Gareth that means we can't take him as if he is not right in four weeks time we would have to replace him.
'Gareth has taken it well and understands the situation - and it is possible he will end up getting to the tournament anyway as we do not have a good record with our hookers staying injury free.
'The difficult decision we would have had to make has been made for us with Gareth taken out of the equation.
'On the plus side we are very happy that we have three fit hookers. Robin McBryde has seen a specialist and been declared fit to play and will now join full training. Robin's leadership skills and the experience he brings to the team are obviously of great value.'
A relieved McBryde said: 'I spoke to the surgeon who operated on my toe and he told me to stop making a fuss and get on with playing - which is what I am going to do.
'I am going to have to learn to play with this injury for the rest of my career, to strap it up and get on with things.
'It is a great relief to know you are going - I had been losing some sleep over it all - and now I can prepare for what has the potential to be the biggest challenge of my career. I have had a Lions tour but that was cut short through injury and going to a World Cup has to rank right up there with the best.
'Gareth is a young man with time and youth on his side and, although it is hard losing an integral member of the squad, he just needs to make himself available as soon as possible.'
A 'gutted' Williams said: 'It was nice to be in the reckoning but that does not stop me being absolutely shattered at the moment. These things are sent to test you and I will bounce back - that's life.
'It will be difficult to sit down and watch the tournament but obviously I wish the boys all the best in Australia.'
WALES SQUAD FOR RWC 2003
Kevin Morgan (Celtic Warriors), Rhys Williams (Cardiff Blues), Garan Evans (Llanelli Scarlets), Gareth Thomas (Celtic Warriors), Mark Jones (Llanelli Scarlets), Mark Taylor (Llanelli Scarlets), Tom Shanklin (Cardiff Blues), Sonny Parker (Celtic Warriors), Iestyn Harris (Cardiff Blues), Ceri Sweeney (Celtic Warriors), Stephen Jones (Llanelli Scarlets), Dwayne Peel (Llanelli Scarlets), Gareth Cooper (Celtic Warriors), Shane Williams (Neath-Swansea Ospreys).
Jonathan Thomas (Neath-Swansea Ospreys), Martyn Williams (Cardiff Blues), Colin Charvis (Unattached), Captain Dafydd Jones (Llanelli Scarlets), Alix Popham (Leeds Tykes), Michael Owen (Gwent Dragons), Gareth Llewellyn (Neath-Swansea Ospreys), Robert Sidoli (Celtic Warriors), Brent Cockbain (Celtic Warriors), Gethin Jenkins (Celtic Warriors),
Adam Jones (Neath-Swansea Ospreys), Duncan Jones (Neath-Swansea Ospreys), Iestyn Thomas (Llanelli Scarlets), Robin McBryde (Llanelli Scarlets), Huw Bennett (Neath-Swansea Ospreys), Mefin Davies (Celtic Warriors).
National Coach - Steve Hansen; Team Manager - Alan Phillips; Skills Coach - Scott Johnson; Fitness Coach - Andrew Hore; Defence Coach - Clive Griffiths; Honorary Medical Officer - Professor John Williams; Physiotherapist - Mark Davies; Masseur - Mike Wadsworth; Notational analysts - Gareth Potter, Mark Barry Davies; Media Officer - Jackie Maitland.