The move comes as Emma Cowdroy steps back from the role due to family commitments, but will remain at AAP in a senior position.
For Davies, whose departure from the Herald was confirmed in October, Friday's appointment completes a career circle, after starting as a cadet journalist at AAP in 2001.
"I'm thrilled to be returning to AAP, where my career in journalism began," she said.
In mid-2020 a group of philanthropists saved AAP from closure after shareholders including News Corp and Nine announced plans to shut the newswire.
Among those philanthropists is AAP Board Chairman John McKinnon, who directed "an enormous amount of gratitude" to Cowdroy for her work as CEO, as he welcomed Davies.
"We look forward to working with Lisa and the team to continue to cement AAP's contribution to an open and democratic society," McKinnon said.
Davies starts as CEO on February 14.
"Outgoing CEO Emma Cowdroy, the board of directors and AAP's dedicated supporters have done an incredible job stabilising the organisation following the ownership change in 2020," Davies said.
"Now we will focus on long-term growth and sustainable success."
Cowdroy has been with AAP for more than 20 years in roles including senior legal counsel.
"It has been a great privilege to lead our national newswire through one of the most challenging periods in its long and distinguished history and to have played a key role in saving it from closure," she said.
"I am proud of the fact that throughout it all, our dedicated team continued to deliver quality, objective news reporting without missing a beat."
Eighty-six-year-old AAP provides content to hundreds of newspapers, websites, TV channels and radio stations with many based in regional Australia. As a not-for-profit organisation it has realised growing philanthropic support and government funding.
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