Davies joined Jurgen Klopp’s side from Preston North End as one of two January deadline day arrivals designed to alleviate the club’s mounting centre-back crisis.
But the 26-year-old failed to register a single competitive appearance for the Reds and only made his debut in Monday’s pre-season friendly with Osasuna.
His first-team prospects for the new campaign were hampered by the returns of Virgil van Dijk, Joe Gomez and Joel Matip as well as Ibrahima Konate’s signing.
Several clubs had been tracking Davies with Celtic, Bournemouth and Burnley among them, but Championship returnees United are set to clinch his signature.
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