Welsh rugby's governing body will now set in place a working party which will report back in six months time on how and when to introduce the new representative team to domestic competition.
"I think this is very exciting for rugby in North Wales, but not just in North Wales, I think this is very exciting for rugby across the whole of Wales," Davies told the Daily Post.
"We can now look at how to keep the quality players in North Wales, keep the quality coaches up there and give them the best possible chance to stay in their area and play rugby at the highest level. And that is something which is very exciting."
Davies, a two-times Lions tourist and a member of the victorious 1971 squad in New Zealand, took part in the original planning process and has been impressed with how the idea has developed.
"What I'm pleased about is that the party that sat down a few years ago and worked on the Strategic Plan in North Wales has worked, and things are going very, very well.
"What happened in North Wales with the plan was a starting point, something to work off. Now is the time to look at how we can best improve and continue to take things forward."
Davies believes the working party will be a good thing for the Welsh game in general and not just for the prospects of success the north of the country.
"I've said for a long time that rugby is a national game, for the whole of Wales and at the moment, because of history there are gaps in Wales that don't have the same enjoyment or involvement in the game.
"What we need to do is plug those gaps and make sure that rugby is truly the national game of Wales, even more so than it is now. And this new working party will be working hard to ensure that."