Williams will enter his 13th season in the league. He started the final 10 regular-season games and two playoff games for the Steelers last season after replacing an injured Chad Scott on Oct. 17.
Reed made his final 21 kicks for the Steelers, who offered the restricted free agent a tender of $1.43 million.
Reed's new deal is expected to lighten the player's hit against the salary cap. Contract numbers for both players will be announced later in the day.