The tag gives the Giants until July 15 to negotiate a long-term deal with Williams. Without an agreement, he'll play the 2020 season on a one-year contract.
He's free to negotiate with other teams when the free-agency signing period begins Wednesday, but New York would receive two first-round picks as compensation if he signs elsewhere.
Under the tag, Williams' 2020 salary will be based on the top five salaries at his position, which average $16.1 million, according to Sports Illustrated's Albert Breer.
The Giants traded a third-round pick and a conditional 2021 fifth-round selection to the New York Jets for the USC product prior to last season's trade deadline.
The No. 6 pick in 2015 made the Pro Bowl in his second season, but Williams has struggled to maintain that level of play.
He posted his least productive campaign in 2019, with half a sack in 15 games between the two New York teams. However, he's still just 25 years old.