The team announced Thursday that Davis has been waived.
Undrafted out of East Carolina in 2012, Davis attempted just seven passes last season as Matt Ryan's top backup.
Over two preseasons in Atlanta, Davis completed 74-of-134 passes (55.3 percent) for 858 yards (6.4 YPA) and a 5:6 TD-to-INT ratio. He added 16 rushes for 115 yards (7.2 YPC).
Davis is a plus athlete with a strong arm. He impressed the Falcons coaching staff during training camp of 2012 but apparently reached a plateau in his development.
His release suggests Yates will enter the season as the No. 2 quarterback, with 2013 seventh-round Sean Renfree in the developmental project role.