Bringham Young University cited a violation of the school's honor code in announcing the move Tuesday evening.
University spokeswoman Carri Jenkins said an honor code review is under way to determine if the BYU sophomore will be allowed to remain in school, as well as his status with the team next season.
BYU's honor code requires students to live a chaste and virtuous life, be honest, abstain from alcoholic beverages, tobacco, tea, coffee and substance abuse, and attend church regularly.
According to reports in the Salt Lake Tribune, Davies was dismissed from the team Tuesday for having premarital sex.
Davies, who grew up in Provo, had started 26 of 29 games for the Cougars and averaged 11.1 points and a team-leading 6.2 rebounds.
The 6-foot-9 sophomore was instrumental in helping contain San Diego State's forwards in the Cougars' 80-67 victory over then-No. 6 San Diego State on Saturday.
The win vaulted BYU to No. 3 in the Associated Press poll (Rankings on espn.com) at that time, as the Cougars improved to 27-2 overall (13-1 Mountain West) and swept the regular-season series over the Aztecs (27-2, 12-2) for the third straight year.
"It's unfortunate. I feel bad for BYU," San Diego State coach Steve Fisher said.
There was no denying the Cougars were a different team in Wednesday night's 82-64 loss to New Mexico. It was their first game without Davies.
The Cougars also lost Jan. 29 in New Mexico, and were counting on help from Davies to secure a win Wednesday night as well in the conference and NCAA tournaments.
BYU was intent on winning the Mountain West Conference tournament next week in Las Vegas, of gaining a No. 1 seed in the NCAA tournament and advancing past the second round, where the Cougars lost last season.
All-America guard Jimmer Fredette remains the Cougars' biggest scoring threat at a nation-leading 27.3 points a game. Backcourtmate Jackson Emery is second in scoring at 12.6 points and Davies was third.
"Wow," said San Diego State forward Malcolm Thomas, who wasn't aware of the suspension until told by reporters after the Aztecs' victory at Wyoming. "He's a big-time player and without him, they're still a good team. They're still going to make a run."
Davies played 27 minutes in the win over the Aztecs. He had four points, six rebounds and one blocked shot but helped contain San Diego State's big men.
He has put up some bigger numbers this season.
He had 20 points and nine rebounds in a win at Wyoming on Feb. 2, had double-doubles at UNLV (15 points, 10 rebounds) and against Colorado State (14 points, 15 rebounds).
Rose could switch to a smaller lineup by moving 6-5 Charles Abouo to power forward or he could lean more heavily on 6-8 sophomore Stephen Rogers or seldom-used 6-10 junior James Anderson.
BYU already was shorthanded after losing 6-9 sophomore Chris Collinsworth for the season because of injury.
Davies commanded the most attention inside, opening things outside for Fredette and Emery.
BYU players said they will continue to support former teammate Brandon Davies "like a brother" despite transgressions that got the starting forwarded kicked off the nation's third-ranked team.