"I'm thrilled to be back in Australia and joining Melbourne Victory in an exciting time for women's football in this country," Williams said.
"Jeff [Hopkins] and the girls have been the team to beat and to be joining the squad for the upcoming season is an exciting opportunity."
Williams is no stranger to the league having scored four goals in five games for the Western Sydney Wanderers during the 2019-20 campaign.
She was also in Australia in November as part of Vlatko Andonovski's squad for the USWNT's friendlies against the Matildas.
"We're incredibly pleased to have someone of Lynn's calibre joining the squad for the upcoming season," Melbourne Victory head coach Jeff Hopkins said.
"Her speed and agility in the final third is what sets Lynn apart from many players at her level and to have her join our attacking line is an exciting prospect."
Melbourne Victory's title defence begins on Dec. 5 against Adelaide United.