The Terriers were already facing up to being without Aaron Mooy, club captain Tommy Smith and Abdelhamid Sabiri until the New Year.
But Williams is now also facing an extended spell on the sidelines after suffering a medial ligament injury in his knee.
“He will be longer sidelined than Aaron and it will be 10 weeks for Danny Williams,” said Wagner, who is also without striker Steve Mounie through suspension tomorrow against Newcastle United.
“Obviously, it is not something we want to have. We have now lost three midfielders in a week - Sabiri, Mooy and Danny Williams - while Tommy Smith is another player with a long-term injury.
“It’s not what we wanted to have, but to be honest this is part of the game.
“We will deal with it and we will need everyone in our squad. This is how we will manage this situation.”
Williams made his first league start since March 3 last weekend in Town’s 1-0 defeat at Arsenal.