"Brian misrepresented events which occurred while he was covering the Iraq War in 2003. It then became clear that on other occasions Brian had done the same while telling that story in other venues," NBC news president Deborah Turness said in an internal memo reprinted by Variety.
"That was wrong and completely inappropriate for someone in Brian's position," Turness added.
Williams' NBC news show is the top-rated US network evening news broadcast with more than 9 million viewers.
On January 30, he said on air that he recalled "a terrible moment a dozen years back in Iraq, when the helicopter we were travelling in was forced down after being hit by an RPG.
"Military crew members who were on the mission turned to social media to cry foul, and accused him of lying.
Three helicopters did make an emergency landing after being hit by small arms and rocket fire on March 24, 2003, over Iraq. But crewmembers said on Facebook and told the military newspaper Stars and Stripes that Williams and his NBC team arrived on another helicopter an hour later.
Williams repeated the exaggeration on at least two other occasions, starting in 2008.