Davis, on the disabled list since May 16 with inflammation of the lining around his heart, will start Friday against the Pittsburgh Pirates, the team said.
Gallardo's move was retroactive to Monday, one day after he was named to the National League All-Star team for the first time -- hours before he suffered the injury while throwing a pitch in the third inning of the Brewers' game against the St. Louis Cardinals.
"Of course I'm disappointed. Any time you go on the DL it's not a good thing," Gallardo said before Tuesday's game with the San Francisco Giants. "We all know as a starting pitcher it's a tough area. You can't really do too much because you use it quite a bit.
"I'm just going to take it easy here this week and rehab and hopefully it gets better," he said.
The team had already said Gallardo (8-4, 2.58 ERA, 122 strikeouts) would miss his next start and the All-Star Game, and on Monday both Gallardo and Brewers GM Doug Melvin said the team would take a wait-and-see approach with the injury.
Gallardo said he was still feeling "a little tightness" in his left oblique on Tuesday.
"It's nothing major, which is a good thing," he said. "But you still have tightness in there and that's the last thing you want to do is go out there and start and hurt it even more."
Brewers manager Ken Macha agreed.
"I'm good with that," he said of the roster move. "I think we've got to be very cautious with this. ... If that thing tears, then that's going to be six weeks. So I don't think we want anything like that to happen."
Added Macha: "We've invested a lot of money in the guy for the long haul. We just want to make sure he's OK and not create a bigger problem than the small one we've got now."
In April, the Brewers signed Gallardo to a five-year deal with a club option for a sixth. The contract guarantees Gallardo $30.1 million and as much as $42.5 million.
Davis had struggled since joining the Brewers as a free agent in the offseason. In seven starts, Davis (1-4, 7.56 ERA) has given up 28 earned runs and 48 hits in 33 1/3 innings.