Williams, who was arbitration-eligible for the first time this offseason, can also earn an extra $120,000 in incentives based on starts and appearances.
This past season, the 30-year-old right-hander was one of baseball's most heartwarming success stories.
After spending all of 2010 pitching in Taiwan, Williams began his 2011 campaign playing in an independent league in Pennsylvania. The Angels signed him to a Minor League contract in June and shipped him off to Triple-A Salt Lake, where he became the affiliate's best starter -- going 7-2 with a 3.91 ERA in 73 2/3 innings -- and earned his first call-up to the Majors since 2007 in mid-August.
Williams would finish the season going 4-0 with a 3.68 ERA while making 10 appearances (six starts) for the Angels. It was the first time the former Giants first-round Draft pick had won in the big leagues since '05 and, more importantly, he turned some heads.
"Jerome is definitely a guy that has shown his stuff and has played a prominent role in the big leagues when pitching to his capabilities," Angels manager Mike Scioscia said in late September. "He's somebody that's jumped up on our depth chart through his performance and pitching the way he does."
With C.J. Wilson signed to a five-year deal last week, Williams is deemed the early favorite for the fifth spot in the Angels' rotation in 2012 -- though youngster Garrett Richards also looms.
Williams is 27-29 with a 4.20 ERA while suiting up for four teams in six seasons in the Majors.
Alden Gonzalez is a reporter for MLB.com. Read his columns and his blog, listen to his podcast and follow him on Twitter. This story was not subject to the approval of Major League Baseball or its clubs.