The fly-half beat off stiff competition from Leinster's Josh van der Flier and Garry Ringrose in the race for the prestigious award.
He said: "It's a great honour to win the young-player award.
"When you think of all the outstanding players coming through in the PRO12, it makes you feel proud to have been chosen.
"But I would not have won it without the help of the boys at the Ospreys.
"I'm really pleased to be recognised for my efforts but it's about the side as much as individuals and it's brilliant to be included in the dream team.
"It's been a tough season for us as a region, but we will learn from the experience and be back stronger than ever next term."
Davies has had an exceptional campaign that has seen him crowned Ospreys' player of the season.
The youngster was also the only Welsh player in the Pro12 dream team, completing a super season for the 22-year-old.
Guinness Pro12 dream team: Isa Nacewa (Leinster, capt); Matt Healy (Connacht), Bundee Aki (Connacht), Ben Te'o (Leinster), Craig Gilroy (Ulster); Sam Davies (Ospreys), Kieran Marmion (Connacht); Dennis Buckley (Connacht), Tom McCartney (Connacht), Finlay Bealham (Connacht), Leone Nakarawa (Glasgow), Ultane Dillane (Connacht), CJ Stander (Munster), Josh Van Der Flier (Leinster), Cornell du Preez (Edinburgh).
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Guinness PRO12 Ospreys News
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