The 20-year-old is eager to gain more first-team experience and, having never made a senior appearance for the Reds, he hopes to secure a loan move to a lower-league team in the coming months.
Davies is reportedly close to agreeing a season-long loan deal with League Two side Crawley Town, with a formal announcement expected soon.
Despite signing two new goalkeepers, Giorgi Mamardashvili from Valencia and Ármin Pécsi from Puskás Akadémia FC, this summer, Davies has recently signed a contract extension with Liverpool, indicating the club's long-term plans for him.
This move follows in the footsteps of Vitezslav Jaros, who recently joined Eredivisie side Ajax on a season-long loan, and will allow Davies to gain valuable first-team experience.
As a homegrown player, Davies has been on the Reds' bench 18 times, including seven appearances last season, but has yet to receive a first-team call-up under manager Arne Slot, who has opted for other goalkeepers in key matches.
The loan move is seen as an opportunity for Davies to gain regular playing time, as he is no longer eligible to play for the U21 side.
Reports suggest that Liverpool may try to replace Davies with a new signing, potentially from a Premier League team, to strengthen their goalkeeping options.