His previous roles over the course of his 27 years in Formula One racing include positions as team manager at Tyrrell, Honda and Arrows, and sporting director at Benetton/Renault and Caterham.
“I’m delighted to be joining a team of Williams’ history and stature in what is a very exciting time for everyone at Grove after a very impressive 2014 season,” said Nielsen.
“In this role I will be able to help ensure that our operations at the race track are maintaining the highest standards and that we are maximising our performance at the race track from a sporting perspective. Williams’ has a very talented team of people and I’m looking forward to working with them.”
Pat Symonds, chief technical officer at Williams, added: “Steve brings a wealth of experience of the sporting side of Formula One and will help us as a team as we aim to climb further up the championship table. He has won world championships in the past and knows what needs to be done on a sporting level for Williams to do this again. We have a talented and ever improving race team and with Steve on board we are well placed to make further operational gains next season.”
Williams had their strongest season in years in 2014, finishing third overall, with drivers Valtteri Bottas and Felipe Massa - who both stay on for 2015 - recording nine podium results between them.