Lyn Jones today hailed Williams's contribution to the region's cause, calling him the 'first Ospreys legend'.
Williams underwent corrective surgery on his shoulder last summer, returning to action in the early stages of the current campaign, only to suffer a hip injury that required keyhole surgery in January, ruling him out of action for the season.
He suffered a further blow earlier this month when he was forced to undergo a second shoulder operation after his old problem flared up again due to pressure on the shoulder caused by the use of crutches following his hip operation.
He has a further year remaining on his career but has opted to call time on his playing career now, rather than putting his body through any further trauma.
Coach Jones commented: "Barry's retirement is a sad loss to the Ospreys and to Welsh rugby in general. In the short history of the region, Barry Williams thoroughly deserves to be recognised as the first Ospreys legend, not only as the first player to reach 100 appearances, but also for the inspirational way that he captained the Ospreys when we were in our embryonic stage. When things were getting tough and we weren't faring too well, Barry stood up to be counted and led by example, on and off the pitch."
Although he will never pull on the Ospreys jersey again, he will not be turning his back on the Liberty Stadium for good, as he has accepted an invitation from bosses at the region to become the first Ospreys ambassador, and will be a regular presence on a match day where he will entertain corporate guests.
After calling time on his playing days, Williams will shortly be taking up the position of key accounts manager with Parker Plant Hire in Llanelli.