Davies, 39, who was a coach at Swansea City, Liverpool, Celtic and Leicester City under Brendan Rodgers, succeeds Tony Mowbray at the newly relegated League One club.
Blues have agreed a compensation package with Spurs as Davies still had two years left on his contract.
The club spoke to over 40 candidates – reportedly including Frank Lampard and Alex Neil – for the job, which became vacant on 21 May when Mowbray confirmed he would not be returning to the role for health reasons.
From our first meeting, it was clear we were aligned on values and shared our ambition for Blues,” said owner and chairman Tom Wagner, who was part of the recruitment panel along with co-owner Tom Brady and chief executive Garry Cook.
“He is widely respected in the game and fulfils our goal to appoint an ambitious, progressive coach. He is motivated to help redefine the club, the culture, and the playing identity.”
Davies added: “As soon as I spoke with Tom, Garry, Tom Brady, and other board members it was clear to me how passionate and committed the football leadership team are to bringing success to this club.
“I will give everything to build an attacking team that reflects this great city, and most importantly to produce a team that our supporters can be proud of.”
: Birmingham City key player found dead some few minutes ago…..
