They can franchise tag him, but given how recent tagged players respond to it, it's never a good relationship once that happens.
Sounds like they are committed to signing him to an extension. Need help on the DL. Plus should have cap space when they say goodbye to Eli Manning.
Compensation wise, most likely Williams would have signed a contract worth a 3rd round compensatory pick. But, again with all comp picks, it's not guaranteed. Depends on whether the Jets dip into free agency this off-season, which I think we expect them to. So, this guarantees that they get their 3rd round pick, and it will be both much higher and a year earlier than a comp pick in 2021. Looking at something around the late 60's to early 70's vs something close to pick 100, plus the 5th which can become a 4th.