The 25-year-old British and Irish Lion, who has won 37 international caps with Wales, has signed a two-year deal with an option for an additional one, Clermont said.
"Though he's young, he has a great experience of top matches and is one of the best players in the world in his position," sporting director Jean-Marc Lhermet told the club's website (www.asm-rugby.com).
"We are sure that his class and determination will help us win more trophies in the coming years."
No financial details were disclosed by Clermont, who have entered the race to attract top players to French rugby.
Ireland's Jonathan Sexton joined Racing Metro in the close season, and South Africa Bryan Habana has already made his Toulon debut this year.
Davies, one of the most exciting centres in Europe, took part in Wales Six Nations triumph last season and had also helped them team to reach the World Cup semi-final the year before.
(Reporting by Gregory Blachier; editing by Amlan Chakraborty)
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