Williams told the B'ham Evening Mail: "The gaffer pulled me after training and said I wasn't going to make the 18 or 20 players he'd chosen for the first game at Arsenal.
"He said that I wasn't for sale but it would be in my interests to go out on loan in the First or Second Division, as long as it was the right club.
"I can understand where he is coming from and, to be honest, I'm glad he's told me to my face where I stand rather than me wondering what's going on.
"I've just turned 22, which is young in footballing terms, and I've only made 30-odd appearances in the Second Division. If I can get more first team experience with a loan move then that will be a positive step in helping me improve my game.
"The gaffer assured me that he felt I had good ability but he wanted to make sure I was ready and had enough experience when he does call on me."
"I spoke to Luton and they wanted to buy me," said Williams.
"I just didn't feel it was right for me to go there. The gaffer said there were other clubs keen but put me under no pressure."