Before joining Falkirk, Williams signed a new contract with Manchester United that extends until 2028 with an option for another year.
Last season, Williams played well on loan with Cheltenham Town in the English Football League's League Two division, scoring his first goals in senior football.
Falkirk's manager, John McGlynn, expressed his excitement about bringing Williams to the team.
"We're thrilled to have Ethan Williams join Falkirk," said McGlynn.
"He's a talented young player who has developed in one of the world's top academies, and we believe he can take his career to the next level with us.
Williams is known for his speed, directness, and goal-scoring ability, which are qualities that McGlynn believes will enhance Falkirk's attacking play and entertain the fans.
McGlynn also thanked several individuals who played a crucial role in making the transfer possible, including Nick Cox, Jonny Evans, and Chris Chiang.
In addition, McGlynn praised Falkirk's Chief Scout, Allan Fraser, for his tireless efforts in identifying Williams and ensuring the team was in a strong position to sign him.