The Doctor Who and Torchwood producer's latest project will follow the activities of a small town in the Welsh valleys which is hit by the threat of a factory closure.
Baker Boys will show the "challenges and triumphs of the workers and their families" as they attempt to keep the local business running.
Helen Raynor and Gary Owen will script the series.
"This is a brilliant and shining idea, and Welsh right down to its bootstraps," said Davies.
"I'm delighted to be a small part of it, and can't wait to see what the wonderful minds of Helen and Gary have got in store."
Owen added: "The Fabulous Baker Boys puts contemporary Welsh life and characters centre-stage, and we're thrilled to be writing something so close to our hearts."
The programme is scheduled to air in 2010.