Terrence Williams I NEVER Bought Sex At Louisville ... 'Cause I Didn't Need To

Ex-NBA player Terrence Williams is calling BS on allegations he had ANY involvement in the Louisville sex scandal ... saying he never had to pay for lovin' in college ... 'cause he was the biggest star there.

Williams -- who now plays overseas -- was at Louisville from '05-'09 and tells TMZ Sports he's furious his name was mentioned in the book "Breaking Cardinal Rules."

The book alleges Terrence ... then a star for the Cardinals ... paid $500 dollars for a sexual escapade with two women -- an assertion which Williams AGGRESSIVELY denies.

"I am not a part of that. To Louisville I am f**king Elvis Presley. So why would I pay anybody for anything?"

"Motherf**kers pay me for pictures and handshakes. And that's not being cocky, 'cause I don't play around with my blessing. I'm very honored to be in that position in Louisville. Louisville is the greatest city, the fans are great, Rick Pitino is great."

He's not finished ... Williams says Katina Powell -- the woman behind the book -- is nothing more than a thirsty, money hungry liar looking for a pay day.

"Nobody's gonna pay attention to a b*tch searching for money. So you make up stuff, and you put out all these allegations. If my name's on anything, provide proof."

"At the end of the day when the smoke clears, she's going to go to jail. You need to be put under the f**king jail. You need to be put in a black f**king hole in Langley."

Terrence says he's got a team of lawyers evaluating his legal options -- and says he's also furious that his former coach Rick Pitino and his close friend Andre McGee are being dragged through the mud.