The move comes about role to Dick Costolo to focus on product development, the area that Williams said at the time is the one he was most interested in.
"Twitter is pleased to announce that Jack Dorsey has agreed to return to Twitter in an everyday role to lead our product development," said Twitter spokeswoman Carolyn Penner via e-mail.
Dorsey will also continue as CEO of Square, an e-payment company he founded after stepping away from Twitter.
Penner noted that Twitter's three co-founders -- Williams, Dorsey and Biz Stone -- have "unselfishly" worn different hats since the company's launch in 2006, based on Twitter's changing needs.
"As executive chairman [of product development], Jack will dive in to work with more than 450 people, led by an experienced executive team. The timing is fortuitous; not only is Twitter experiencing record growth, but we also now have a new infrastructure that will keep us ahead of that growth and enable us to launch products that will make Twitter more instant, simple and always present," Penner added, referring to a massive infrastructure upgrade and migration Twitter wrapped up last week.