Shane will continue playing for the Ospreys until the end of the current season, and in his new role will promote rugby in and around the region whilst also working in conjunction with the Ospreys existing and future commercial partners, local, national and international.
In addition to the ambassadorial role, he will also take up a similar post with the Ospreys long-term partners Cuddy Group, alongside his media commitments and personal business interests.
Ospreys Managing Director, Mike Cuddy, said: "Shane has been a tremendous servant to the region throughout his long career and I've no doubt whatsoever that he can be an even bigger success off the field than he was on it.
"I'm looking forward to working closely with Shane the business man for the next 15 years, just as I have with Shane the rugby player for the last 15."
Williams commented: "My future with the Ospreys was never in doubt. Things like this take time to sort out but I'm just delighted that I'm going to continue being a part of the region I love, the Ospreys."