The free transfer move is subject to a medical and the agreement of personal terms but Spurs head coach Martin Jol said he was delighted with the move for the 32-year-old.
Spurs have seen off interest from Arsenal and their capture of Davids will rival Chelsea's signing of Shaun Wright-Phillips as the biggest deal of the summer so far.
Jol said of his countryman: "He is one of the most versatile midfielders, a playmaker, a ball-winner with great stamina and huge charisma and one of the best midfielders to come out of Holland in the last 10 years."
The Aston Villa manager David O'Leary is set to step up his attempt to sign the Liverpool striker Milan Baros in the next 48 hours following the departure of Darius Vassell, against a backdrop of growing unrest among fans at the lack of success in the transfer market.
Villa will receive around £2.5m for the services of Vassell, who is set to sign a four-year deal with Manchester City believed to be worth about £30,000 a week. But that will leave O'Leary with just the summer capture of Kevin Phillips, plus club-record signing Juan Pablo Angel and Luke Moore to compete for places in attack.
Villa return from their pre-season tour of Sweden today and that is when O'Leary will attempt to open meaningful talks over 23-year-old Baros with Liverpool. The Midlands club are understood to be prepared to pay £5m to £6m for the Czech Republic international - surplus to requirements after the arrival of Peter Crouch - while Liverpool would prefer £7m.
O'Leary is hoping he can help Baros to produce the kind of deadly finishing which has brought him 25 goals in 37 appearances for his country rather than his stop-start form for the Merseyside club.
O'Leary is understood to have around £9m left of his summer kitty to spend after capturing Phillips, Aaron Hughes, Patrik Berger and Stuart Taylor so far this summer for around £3m.
The lack of success in the transfer market is opening up old wounds, with the chairman Doug Ellis again the target for fans' ire. The Villa Fans Combined spokesman Jonathan Fear said: "I think people are surprised at the Vassell sale. To be fair he has never fulfilled his potential at Villa and his strike-rate has always been poor for us.
"However, the 'surprise' is to do with the fact we were promised significant funds this summer for new arrivals but at the moment we have had more leaving than coming in.
"Not only that, but David O'Leary has obviously been forced to target the lower-priced end of the market.
"As for Vassell, I would have thought with a squad the size that we have got, and the fact the purchase price looks extremely low, on the surface it may have been better to keep him.
"However, as he only had one year left on his contract - something the board have a bad habit of allowing to happen - and with constant links to Milan Baros, maybe the sale was made to clear the way for a big arrival.
"Villa fans are praying for some big-name signings but more importantly the news from the chairman that he will finally relent and give power to people slightly less stale and set in their ways. I'm not confident that either prayer will be answered."
O'Leary wants his current No 1 Thomas Sorensen - plus the midfielder Gavin McCann - to sign new long-term contracts as they enter the final year of their current deals.
Speaking about McCann, O'Leary said: "Gavin is the kind of unsung hero that is sometimes only appreciated by the players. You sometimes don't realise what he contributes until he is missing from the team."
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