Williams joined his teammate and fellow striker Roy Krishna at the club which has won the ISL trophy twice.
Williams made his debut for Queensland Roar and went onto play for several A-League clubs, including North Queensland Fury, Sydney FC, Melbourne City and Wellington Phoenix.
The 31-year-old had also played in Europe for Danish Superliga club Brondby and NB I club Haladas in Hungary.
Williams wreaked havoc in the A-League last season alongside Krishna, sharing 30 goals between them in the competition. He scored eleven times in 27 matches. Williams has also represented his country at the U-20 FIFA World Youth Championship.
"David Williams is another signing I am very happy with. His pace and technique will be valuable to us. He also brings variety to the squad since he can play on either side of the wings. His understanding with teammate Roy Krishna will be crucial for us," ATK's Spanish coach Antonio Habas said.
"I am happy to join ATK for the upcoming season of Indian Super League. I am absolutely delighted that I will be able to play alongside my friend Roy Krishna. Hopefully, together as a team, we will be able to win the title and create memories," Williams said.
Earlier this month, ATK had announced the signing of Fiji striker Roy Krishna.
Krishna also played as a striker for Wellington Phoenix and is also the captain of the Fiji national football team.
The attacking forward scored 19 goals in 27 matches for the 2018-19 season with Wellington Phoenix FC.
( With inputs from IANS )