The 24-year-old Surrey player has told the Daily Telegraph he decided to make the announcement after months of personal conflict.
Davies, who told his family he was gay five years ago and has enjoyed their complete support, said it was a huge relief to finally come clean and be honest with the wider public.
And he said he hoped his decision would help other young gay people to have the confidence to follow in his footsteps.
"This is the right time for me…I feel it is right to be out in the open about my sexuality. If more people do it, the more acceptable it will become. That must be a good thing."
Davies made his international debut in 2009 during the Twenty20 in Trinidad and is widely tipped as a future star of the game.
He decided to confide in his England colleagues after being called up for the recent Ashes tour to Australia.
He said he received wonderful support from his team-mates, especially fellow wicketkeeper Matt Prior and captain, Andrew Strauss, and now looks forward to getting on with, what he hopes will be, a long and successful career at the highest level.