The 99-cap Wales international was set to return from a three-month absence in time for Friday's Heineken Cup clash with Edinburgh but suffered a recurrence of the injury in training.
Blues coach Justin Burnell admitted he feared the 36-year-old flanker would be sidelined for the foreseeable future and may even need a metal plate inserting into the arm.
And while the Blues are well stocked in the back row with Wales captain Sam Warburton returning from international duty, Burnell insisted Williams' injury was a bitter blow for both the player and the club.
"Martyn has had a recurrence of the injury, which is very disappointing," he said. "He's been set back for another period.
"He had a knock on his arm during a very physical session which was required for the squad.
"So he's gone back now to have more X-rays.
"We could be without him for a fair while. He's gutted. I felt very sorry for him because we had included him in the squad for this weekend.
"With that and having had this fresh knock, I can understand his total frustration and disappointment. I really feel for him because he's been very supportive of the players, management and coaching staff while he has been out.
"He's been outstanding for us actually."
In addition to Warburton, Gethin Jenkins, Jamie Roberts, Leigh Halfpenny, Bradley Davies, Lloyd Williams, Scott Andrews and Alex Cuthbert are all set to return for the Blues.
Gavin Henson has also joined in training with the club and could make his Blues debut over the festive period.
"Everyone is excited about Gav," added Burnell.
"We were informed by our physios that he will be taking full part in training on Thursday.
"Then let's get a full week of training next week then hopefully start pinpointing some games to come back.
"Obviously we've got the Dragons on the 23rd and the Ospreys on New Year's Day and hopefully he can take part in one of those games."
63x46.png){kind=logo}