According to multiple reports, the trade involves a second-round pick.
The trade, first reported by Jay Glazer, caps an eventful summer for Davis, which saw him publicly criticized on "Hard Knocks" and then get demoted to the second-team defense behind newcomer Richard Marshall.
Davis has one year left on the contract he signed after being the 25th overall pick in 2009.
Davis led the team in interceptions in both 2009 and 2011, both times with four, but never reached the level his physical attributes suggested he should.
He was benched for a game last year after a practice incident involving Brandon Marshall and his work habits were a regular source of concern. New defensive backs coach Lou Aranumo was shown on "Hard Knocks" admonishing Davis early in camp about not demonstrating more desire.
That, of course, was accompanied by a shot of Coach Joe Philbin asking Davis at the start of a practice whether Davis had taken care of his bladder, a reference to Davis' penchant for leaving practice to go to the bathroom.
Davis made headlines before last season when he suggested that he and Sean Smith, who came in the same year after being a second-round pick, represented the best cornerback tandem in the NFL.
The departure of Davis leaves the Dolphins well stocked in the 2012 draft, with extra picks in the second and third rounds, the latter coming in the trade of Marshall to Chicago.
But it leaves the Dolphins a little thin at cornerback right now.
Smith and Richard Marshall should start the opener Sept. 9 at Houston, and Nolan Carroll figures to move into the third cornerback role. But the Dolphins don't have a clear-cut No. 4 cornerback at this point.
Along with Smith, Marshall and Carroll, the other cornerbacks currently on the roster are Vincent Agnew, Kevyn Scott and Quinten Lawrence.
Smith also is in the last year of his contract, so re-signing him now becomes more important with Davis no longer around.
The trade of Davis leaves the Dolphins with 77 players on their roster, which means they must make two more roster moves before 4 p.m. Monday.
Along with putting rookie running back Jonas Gray on PUP Saturday, the Dolphins also released the following nine players — DT Chas Alecxih,TE Les Brown, CB Marcus Brown, S Tyrell Johnson, CB Trenton Hughes, LB Josh Linam, RB Jerome Messam, DE Jacquies Smith, CB Jonathan Wade.