The west London outfit saw their 13-year Premier League stay end on Sunday, following a 2-2 home draw with Crystal Palace.
Fulham's relegation had already been confirmed before the season-ending clash and coach Felix Magath showed his hand by playing youngsters Cauley Woodrow and Chris David, who both scored.
Magath has previously spoken of his admiration for the club's young prospects, who reached this year's FA Youth Cup final, and the indication is that he will lean on them in next season's Championship campaign.
Williams – who moved to Fulham from Portsmouth in 2012 – is just 20, but enjoyed an excellent season on loan at Oxford United.
And his form has been rewarded with a fresh deal – one that can be extended by a further year.
A Fulham statement read: "We are pleased to confirm that Ryan Williams has signed a new two-year contract until June 2016, with the club holding an option to extend the deal by a further year.
"The 20-year-old spent the 2013/14 campaign on loan at Oxford United, and impressed during his time with the Sky Bet League Two outfit.
"Featuring 42 times in all competitions, the Australian winger scored eight goals for the U's as they finished the season in eighth position – one place off the play-offs."
Williams, who has represented Australia at youth levels, is the younger brother of Middlesbrough utility player Rhys Williams.
