The seven-time All-Star plans to decline his $28.7-million player option for next season and re-sign with the Lakers, sources told The Athletic's Shams Charania.
Davis and his agent, Rich Paul, will reportedly negotiate a new contract with the club in the coming weeks.
The big man hinted at the possibility of returning during an Instagram Live appearance shortly after Los Angeles captured its record-tying 17th NBA title.
Davis thrived in his first season with the purple and gold, averaging 26.1 points, 9.3 boards, and 2.3 blocks. He also finished second in Defensive Player of the Year voting.
The Lakers also expect guards Kentavious Caldwell-Pope and Rajon Rondo to decline their player options for 2020-21, Charania reports. The team has apparently expressed interest in bringing back both players.