Graham Alexander was sacked on Monday after an eight-match win-less streak saw the club drop to 16th in League Two.
Williamson, currently in charge of Gateshead in the National League, plied his career at Wycombe Wanderers and Newcastle United, making more than 150 appearances for the Magpies in the top flight.
Taking up management in the summer of 2019, the 39-year-old has helped the club into the National League, where they currently sit sixth.
Former Dons boss Karl Robinson and Portsmouth head Danny Cowley are also listed amongst the front runners.
1. The front runners to take over at Stadium MK
The early odds see Gateshead boss Mike Williamson the early favourite, but here are the others named by bookmakers Bet Victor Photo: Pete Norton
3. Karl Robinson
The former MK Dons and Oxford United boss is tipped at 2/1 to return Photo: Jane Russell
4. Danny Cowley
A regular on Dons' manager odds lists, the former Lincoln and Portsmouth man is a relative outsider at 12/1 Photo: Alex Morton