Davis was attempting to play through the injury, but the club eventually decided an extended period of rest was required.
"We're just trying to get ahead of it as best we can," said Blue Jays manager John Farrell. "His game is centered around speed and we've got to make sure he has ample time to get it back to 100 percent."
Davis initially twisted his ankle during a rundown between first and second base on April 1st. He sat out the following two games but returned to play in the three-game series against Oakland.
The 30-year-old Davis played in a 14-inning game on Saturday night against the Angels, followed by an early afternoon game the next day. The added workload took its toll.
"To his credit, he tried to go on it as best he could," Farrell said. "We felt like we were making headway, but I know just the sheer volume of the 14-inning game flared it up a little bit -- quick turnaround, he's right back out there again.
"What's best for him [is] to make sure that we address this now and not that it lingers on for an extended period of time like it has for the past week."
Davis led the Blue Jays in home runs during Spring Training but had difficulty driving the ball after rolling his ankle. He was batting .156 with one extra-base hit in seven games this season.
Toronto will recall utilityman Mike McCoy to take Davis' spot on the 25-man active roster.
Recently activated Corey Patterson got the start in center field Monday night against Seattle, and he is expected to assume that role until Davis makes his return.