The 41-year-old right-hander was 8-15 with a 5.27 ERA last season and had an 11.32 ERA in spring training this year. He gave up five runs and five hits in three innings Friday during a 10-0 exhibition loss to Detroit.
First baseman Lance Berkman questioned the timing.
"Possibly a bit premature," he said. "The game is completely different in the regular season than it is in spring training, especially from a guy like Woody who has been around the block a few times."
Williams signed a $12.5 million, two-year contract with the Astros before last season and is owed a $6.25 million salary for this year and a $250,000 buyout of a 2009 club option worth $6.75 million. He had a $6 million base salary last year and earned $250,000 in performance bonuses.
Williams is 132-116 with a 4.19 ERA in a 15-year career that includes stints with Toronto, St. Louis and San Diego. He had a career-high 18 wins with the Cardinals in 2003.
KRIV reported Williams plans to retire.
With Williams out of the picture, Chris Sampson will be the fifth starter for the Astros. Sampson was 7-8 with a 4.59 ERA last year, his first full season in the majors.
Quintero had been the biggest question mark for the team. He had lost 30 pounds during spring training and batted .350 with 11 RBI, which was tied for third on the team.
But with veteran utility infielder Geoff Blum out with a bruised left hip, the team felt it needed to keep Perez, who plays all four infield positions, instead of keeping Quintero as the third catcher.
"I proved I can play in the big leagues," an emotional Quintero said. "I did everything I could do. I'm going to just wait and see if somebody will pick me up."