The Academy right-back’s season was brought to a premature end last month after picking up a foot injury while on loan at Bognor.
Yet impressive progress with his home-town club had already caught the eye of Paul Cook, who has sanctioned a 12-month contract.
Davies had been one of seven second-year scholars waiting to learn whether they have Fratton Park futures.
Academy manager Mark Kelly met with the hopefuls at the end of last week to deliver the club’s verdict.
The outcomes are expected to be publicly announced within the next 24 hours.
Skipper Davies is among those who will remain as he seeks to make a first-team impact.
The 18-year-old joined Bognor in January on a loan deal until the end of the season and proceded to shine for Jamie Howell’s side.
Joining fellow Pompey players Chad Field and Snorre Nilsen at Nyewood Lane, he established himself at right-back and featured in their FA Trophy progress.
Yet midway through March, during their semi-final second leg at Grimsby, he broke a bone in his foot.
It disappointingly ended Davies’ season early, signalling his return to Pompey for treatment.
Nonetheless, the Blues have high hopes for the North End youngster, who scored twice in the FA Youth Cup at Bristol Rovers this season.
He was granted his Blues first-team debut in the Johnstone’s Paint Trophy defeat at Exeter City in September as Cook fielded a youthful side.
Davies also made five appearances for the National League South Hawks earlier in the campaign.
– NEIL ALLEN