The pair were arrested outside a nightclub near the Champs Elysees on Saturday and spent a night in jail.
Williams, 35, will appear in court at a later date having accepted a charge of buying cocaine, judicial sources say.
O'Connor, 26, faces a charge of possession. They were found with 2.4 grams of the drug.
Police, quoted by AFP, alleged Williams was seen in a car with two suspected drug dealers. O'Connor was allegedly spotted outside the car acting as a lookout.
Williams plays for the French team Racing 92 and O'Connor is at Toulon.
The two suspected dealers were also arrested.
Racing 92 said in a statement (in French) that it had suspended Williams "temporarily".
"If the investigation confirmed the possession of cocaine and the transaction, it would not only be against the law but also a serious breach of our ethics," the club said.
Toulon is still deciding whether to take action against O'Connor, who made 44 appearances for Australia between 2008 and 2013.
Williams earned 77 New Zealand caps between 2002 and 2012.
Last October two other New Zealanders playing for Racing 92 were cleared of doping charges.
The side are current champions of French rugby.
Two former rugby internationals, New Zealander Ali Williams and Australian James O'Connor, have been charged with drug offences in Paris.