The bout had been scheduled for Atlantic City's Boardwalk Hall and Pavlik was expected to begin training this week.
The staph infection already pushed back the fight once. Pavlik promoter Top Rank said Wednesday the fighter had not fully recovered.
Top Rank president Todd duBoef said that once Pavlik is medically cleared his organization will try to line up another bout.
Williams promoter Dan Goossen said he won't wait for Pavlik again and will look for a different opponent. Williams, one of the most feared fighters from welterweight to super middleweight, hasn't fought since a lopsided decision over Winky Wright in April.
"These are the circumstances that you try to avoid and move past, and I'm not going to sit here and denigrate Pavlik or Top Rank," Goossen told The Associated Press. "They all had their chance."
Goossen declined to discuss possible opponents for Williams (37-1, 27 KOs), but HBO Sports president Ross Greenburg said the show will go on. It was expected to be a doubleheader with the opening televised bout featuring welterweights Joshua Clottey and Carlos Quintana.
"We are obviously very disappointed that the Paul Williams vs. Kelly Pavlik fight has been canceled," Greenburg said in an e-mail to The Associated Press. "Dan Goossen has told us he is looking for the best opponent for Paul Williams to fight on Dec. 5."