Davies began his professional career at the Scarlets, making his competitive debut against Cardiff Blues in September 2005. In total,
He made 36 appearances for the Scarlets, including five in the Heineken Cup, scoring two tries, before signing for French T14 side Brive, where he linked up with Welsh caps Barry Davies (now at the Ospreys) and Alix Popham ahead of the 2008/09 season.
His T14 debut came against Castres in September '08, and he went on to become a regular for the French side, earning good reviews in the local media for his halfback partnership with England international Andy Goode.
Speaking about his move to the Ospreys, Davies said: "It's an exciting time for me personally, it's a great move for me and I'm really looking forward to being part of what I hope will be a successful season as an Osprey. When I had the chance to sign I jumped at it, there's a great set-up and good coaches, it's just a fantastic organisation to be part of.
"There's real competition at nine here and there are no guarantees, but I'm really looking forward to the challenge. With Mike Phillips coming back late and Rhys Webb injured, there's still Jamie Nutbrown and Rhodri Wells in contention, as well as Tom Isaacs who can play there, but hopefully, I'll get my chance early in the season. If I do, I have to take it. I'm sure that with so many good players challenging for the shirt we will push each other on, improving our game.
"I'm a completely different person to the one who went to France last year, I've benefited massively from the experience. Life outside rugby used to revolve around just going to my mates. When you make that move then you have to grow up quickly, but I think I adapted well. Playing in France was a great experience.
"It's arguably the toughest league in the world, packed with great players and there is no hiding place out there. Going to places like Stade Francais, Biarritz and Clermont Auvergne to play is a fantastic experience and really helps to take you to the next level. I played more than half of Brive's games in the T14 so I'd say I more than held my own, but I'm looking forward to fresh challenges now with the Ospreys, and I'm hoping that the coaches will help me continue to develop my game."
Ospreys Elite Performance Director Andrew Hore added: "With Mike Phillips not reporting back for duty until next month having been on the Lions tour and likely to be involved with the Wales team for lengthy periods of the season and Rhys Webb on the long term injured list following knee surgery, it leaves just with just two other front line scum halves in Jamie Nutbrown and Rhodri Wells so this signing is an important one that provides us with additional cover in a crucial position.
"Liam is a talented young player who has benefited from the experience of a spell in France and he has the desire and ambition to continue improving, so we're confident that he will prove to be an asset to the Ospreys over the coming season. We are committed to developing young Welsh talent here at the Ospreys, and Liam certainly fits that description. We believe that our ongoing investment in coaches and support staff makes us the best placed region to develop Welsh talent.
"Significantly, following on from Ross Davies and Barry Davies, he is the third Welsh player that we have brought back to Wales this summer who were previously playing their rugby outside of the country, moves which will hopefully prove beneficial not only to the Ospreys but to Welsh rugby as a whole."