In the back division Scarlets playmaker Rhys Priestland has made the cut after his impressive performances in the Heineken Cup and Magners League for his region. He is the only uncapped players amongst the backs but team-mate Morgan Stoddart returns to the national set up for the first time since 2008.
Up front there are a further four uncapped players with Dragons back row Toby Faletau and Blues prop Scott Andrews retained, but Ospreys prop Ryan Bevington and Scarlets back row Josh Turnbull added to the squad.
Veteran Williams, who this week has also been told by his club Cardiff Blues that his contract will not be extended past this season, is not included despite recent performances.
Star of the autumn international series, George North has not been included due to injury and there is not room for Ospreys' Dan Biggar or Blues do Tom James or Chris Czekaj.
Wales kick off their campaign against England at the Millennium Stadium on Friday February 4 and Warren Gatland is looking forward to the opening fixture.
"It all starts against England at the Millennium stadium in a fortnight and they don't come much bigger than that," said Gatland.
"We have a pretty good record against them in recent years and enjoy playing against them, especially at the Millennium Stadium and it is a game that could really set the tone for the season ahead for both sides and in a World Cup year that's all the at needs to be said."
"We have deliberately kept the squad as small as possible and have reverted back largely to the philosophy we had during the Grand Slam year in 2008,"
"We want to keep intensity levels up in training and have ensured that we are not carrying players with injury. Everyone here is fighting fit and able to take a full part and challenge each other for selection.
"It's a boost to have one or two players back from injury in the backline with Shane (Williams) and Lee (Byrne) both doubts at one stage and Leigh (Halfpenny) and Jamie (Roberts) returning after being unavailable to us in the Autumn, there's an exciting look about the backs.
"Up front, its well documented that we have lost a couple of players in the front row, but that gives opportunities to others to put their hands up and we are pleased with the options we have got in the pack.
FORWARDS: Paul James (Ospreys), John Yapp (Blues), Craig Mitchell (Ospreys), Ryan Bevington (Ospreys), Scott Andrews (Blues), Matthew Rees (Scarlets, capt), Richard Hibbard (Ospreys), Alun Wyn Jones (Ospreys), Bradley Davies (Blues), Ryan Jones (Ospreys), Sam Warburton (Blues), Jonathan Thomas (Ospreys), Andy Powell (Wasps), Josh Turnbull (Scarlets), Toby Faletau (Dragons), Dan Lydiate (Dragons)
BACKS: Mike Phillips (Ospreys), Dwayne Peel (Sharks), Tavis Knoyle (Scarlets), Stephen Jones (Scarlets), Rhys Priestland (Scarlets), James Hook (Ospreys), Jamie Roberts (Blues), Jonathan Davies (Scarlets), Shane Williams (Ospreys), Morgan Stoddart (Scarlets), Leigh Halfpenny (Blues), Lee Byrne (Ospreys)