USA Basketball announced the moves, which will see Lue, Miami's Erik Spoelstra and Gonzaga University coach Mark Few assist Kerr, of the reigning NBA champion Golden State Warriors.
"I'm truly honoured," Lue said. "Coaching USA Basketball has always been a dream of mine and I'm humbled to take on the challenge."
Lue won two NBA titles as a player with the Los Angeles Lakers in 2000 and 2001 and as a head coach with the LeBron James-led Cleveland Cavaliers in 2016.
"I'm excited to add Ty to what is already an outstanding staff," Kerr said. "He's a brilliant coach I've admired for years. Ty's experience and expertise will add an important dynamic to the group as we face the challenges ahead."
Lue, whose Clippers rank fourth in the NBA's Western Conference at 31-26, will help assemble US teams for the 2023 Basketball World Cup and 2024 Paris Olympics.
The Americans have won the past four men's Olympic basketball titles and two of the past three World Cup crowns.
Williams, an assistant on the 2014 World Cup and 2016 Rio Olympic US gold medal squads, stepped aside due to family commitments.
"After further consideration, I have decided to withdraw," Williams said. "This has been a difficult choice but given the timing and the demands of the commitment, it is the best choice for myself and my family."
