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Williams reluctantly resigned from his position on the city council after allegations came to light that he tried to solicit money from a developer.
Now, an arrest warrant filed August 30 shows Williams is accused of touching a 10-year-old boy while watching the child.
The incident happened in December shortly before Christmas, Fayetteville Police said.
The case came to light, police told ABC11, when the child and his mother were having a conversation about inappropriate touching and the child disclosed that Williams had touched him.
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"As she disclosed what is appropriate and what is not, that's when the victim disclosed to her the incident that had happened, " said Sgt. Peggy Smith with Fayetteville Police.
Williams is charged with one count of indecent liberties with a child.
Williams' attorney. Ronald C. Crosby Jr., said his client voluntarily turned himself in to law enforcement in response to the warrant and has always maintained that "he never engaged in the inappropriate action he is charged with."
"Nothing about today's proceedings change Mr. Williams' position," Crosby said in a statement. "We are confident that Mr. Williams will be fully exonerated."
At the time of his ouster from the city council, Williams maintained that he had done nothing wrong, saying "I did not violate any law, or ordinance, or other legal authority," and blamed local media for "false and misleading accusations."
Read his full resignation letter
Williams was under investigation after allegedly asking Prince Charles Hotel developer Jordan Jones for $15,000 in exchange for handling a favor with a property's title.