The addition of Williams comes after McAllister signed striker Dean Holdsworth on a month's loan from Premiership side Bolton Wanderers on Thursday.
The 20-year-old has been brought in at Highfield Road as cover for the injured Morten Hyldgaard, who is still struggling with a thigh strain.
Williams joined The Red Devils as a trainee in 1999 and rapidly progressed into the Old Trafford club's reserves last season.
He has appeared on the first team bench for United boss Sir Alex Ferguson while number one Fabien Barthez was injured.
Williams will be available for selection as The Sky Blues face Craig Brown's Preston North End in Division One on Saturday.
