Williams. who joined Munster at the start of the 2001/2002, has another year to run on his contract with Munster but CEO Garrett Fitzgerald, once made aware of the Australian's interest indicated they would release him in the event that negotiations necessitated.
"From our own perspective we are obviously disappointed to see Jim go. He has been a huge asset to us both as a player and more recently as a coach. However, we do recognise the honour and importance of his new role and wish him every success."
Williams made Munster management aware of the ARU's interest some weeks ago and the Munster Provincial Team Management will now start the process to replace Williams.
Williams made his debut for Munster in the 40-19 Celtic League win over Connacht in Thomond Park in August 2001 and went on the win 74 caps before retiring at the end of the 2004/2005 season. He captained the squad the season that culminated with victory in the Celtic League final and when he hung up his boots he joined the Munster coaching staff under coach Declan Kidney.
Speaking from his Cork home Williams said, " To be asked to coach at national level is such a huge honour and one that any coach would jump at. It's an opportunity that doesn't come around too often and I am really looking forward to working with Robbie Deans. It's an exciting challenge at a time when Australian rugby maybe needs to go in a different direction and I'm looking forward to being part of that process.
"Being a part of the Munster set-up over the past eight seasons has been one of the greats periods of my career professionally while on a personal level, my wife Megan and me couldn't have asked for a better environment for us and our family. All that considered, there is a job still to be done. We are mid way through what has been a good season but there is a lot of rugby to be played yet. There's lot to play for. Now I just want to do whatever I can to help Munster achieve what we set out to at the start of the season.
Munster coach Declan Kidney said, "While never wanting to lose a member of the Munster family we fully understand the honour been bestowed on Jim by his national team. We appreciate the contribution he's made to Munster rugby and we wish him and his family all the best for the future."
Guinness PRO12
Suite 208, Alexandra House,
The Sweepstakes
Ballsbridge, Dublin 4, Ireland