Williams suffered massive head injuries at Barwon Prison, The Herald Sun, Melbourne, reported.
The 39-year-old Williams was with two other inmates at the time of the attack and a prison guard was about 33 feet away, Victoria police said.
Williams was involved in a gangland war in Melbourne that led to an estimated 35 deaths between 1998 and 2009, The Times Online reported Monday. He and his gang engaged in a drug feud with the Moran family, a member of which allegedly shot Williams in the stomach a decade ago.
That shooting led to a string of killings blamed on Williams and his gang, including the execution of a man in a van carrying children to a sports clinic and the torture death of a man found burned with a soldering iron.
Williams pleaded guilty in 2007 to three killings, though Victoria police alleged he was implicated in 11.