Davies, 45, has signed a contract until 2022, according to the Brussels club's website this Saturday, and will complete the coaching staff alongside Pär Zetterberg, Karim Belhocine, Jonas De Roeck and Floribert Ngalula, goalkeeper Max de Jong and Kompany himself, who will be coaches as well as players.
All of them "will help Vincent Kompany implement his vision of football at Anderlecht," the club said. Davies, like Kompany, arrives at Anderlecht from Manchester City.
The Welshman is a former player of teams such as Manchester United and Chester City, and has been working in the City academy.
In 2018 he was appointed head of the Academy, responsible for applying Pep Guardiola's style of play in the U13 and U23 teams, Anderlecht recalled in its statement.
"We are initiating a great project: to return Anderlecht to where it belongs, with special emphasis on the development of talented young players," Davies said.
Kompany, 33, announced last Sunday that he was leaving Manchester City and returning to Anderlecht, where he trained and made his first division debut, to become a player-coach for the next three years.