The centre-back joins for an undisclosed fee, having passed a medical and agreed a contract to June 2014.
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Davies, who began his career at Luton Town, made 66 appearances for Villa and scored three goals, most memorably in the 3-1 win at Liverpool last season in the Barclays Premier League.
Three Months
The player has spent the last three months on loan at Leicester City, but will now boost a City defence that will be without the injured Scott Dann for the remainder of the seasonVilla manager Gerard Houllier said: "We have four centre backs in James Collins, Richard Dunne, Carlos Cuellar and Ciaran Clark. Curtis was not getting enough time to play and I understand that.
"He goes with our best wishes and I hope this move will help in his career development because he is a nice lad."
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