Reports on Sunday suggested that Neil Warnock would be brought in to replace the Scot in the wake of the 5-0 defeat at Derby, the culmination of a run of poor form for the Reds.
Warnock is said to have already met with the Forest hierarchy and will appoint Keith Curle as his assistant.
Davies continued his media blackout after the game, assistant manager David Kelly speaking to the press, and has not been seen at the club's training ground on Monday morning with a formal announcement expected at some point during the day.
***Update*** A club statement, issued just after midday on the official website has confirmed the expected news and thanks 'Mr Davies' for his efforts during his second spell as manager.