Adam Schefter of ESPN broke the news that Davis has been traded to the Broncos.
The 49ers will receive sixth-round picks in 2016 and 2017 from the Broncos in return for Davis and a 2016 seventh-round pick.
Davis had 18 catches for 194 yards in six games for the 49ers this season.
The trade comes after it was reported that Davis was critical of Colin Kaepernick in a team meeting, which led to an exchange with left tackle Joe Staley.
Broncos General Manager John Elway confirmed the deal in a tweet:
We've agreed to trade for two-time Pro Bowl TE Vernon Davis from SF. He'll be a valuable addition to our team w/his experience & leadership.— John Elway (@johnelway) November 2, 2015