Liverpool have agreed a fee with Preston North End for the signature of the centre-back and he is set to have a medical with the Reds this morning.
Davies is expected to complete a permanent move to Anfield before the transfer window slams shut tonight.
Celtic were trying to sign Davies and appeared to be in pole position, while the player also had interest from Bournemouth.
Now it has emerged he had admirers in the Premier League with Burnley and Sheffield United both keen.
The defender though is swapping the Championship for the Premier League champions in the shape of Liverpool.
Liverpool will pay just £500,000 up front for Davies with add-ons taking the total fee up to £1.6m.
Preston also hold a sell-on clause on Davies in the event he moves on from Liverpool in the future.