The 18-year-old right-back, a former England youth international, has penned a four-year deal at the League One club.
Williams played nine games in the third tier while on loan at Bury last term, where he played alongside fellow Tykes new boy Callum Styles.
"Jordan will bring something a bit different to the squad and I am happy to have him in my side," Barnsley boss Daniel Stendel told the official club website.
"He's very fast and clever, this is the type of player that can play how we want to play and by signing a long contract he has committed to our project here. We know he will come in and work hard and learn our style."
Barnsley began their 2018-19 campaign with a 4-0 win over Oxford United at Oakwell.