The fifth-year option would have carried a $15.68 million salary for Davis in 2021.
NFL Network was first to report that the option would not be picked up.
In three seasons with the Titans, Davis, the No. 5 overall pick in the 2017 NFL draft, has 142 receptions for 1,867 yards and six touchdowns. In 2019, he scored two touchdowns during the regular season -- one each from quarterbacks Marcus Mariota and Ryan Tannehill -- and another in the playoffs against the Baltimore Ravens on a pass from running back Derrick Henry.
Tannehill said on a conference call last week with the local media that he would like to get Davis more opportunities this season.
"I definitely think my chemistry will grow with Corey this year. Such a talented guy," Tannehill said. "Looking forward to building on what we started last year and our rapport, and looking forward to him making some big plays for us because I know he has the talent. I've seen him make the plays. Really excited to see him just keep growing and make those plays in 2020."
Meanwhile, the Titans will exercise the fifth-year option for cornerback Adoree' Jackson, a source told ESPN. By exercising the option, the Titans guarantee Jackson's contract for injury only in 2021 and his salary will be approximately $10.24 million -- the average of the third- through 25th-highest salaries at his position.
Jackson, the 18th overall pick in the 2017 draft, has started 39 games over the past three seasons, along with five playoff starts. The fourth-year player has two interceptions and 33 passes defended over his career.
A foot injury kept him out of the final four regular-season games last season, but Jackson returned to start three playoff games and had five passes defended in the postseason.
The Titans could look for Jackson to assume a more significant role in the secondary this season. The likely loss of veteran cornerback Logan Ryan to free agency creates a void in nickel packages for the Titans, and general manager Jon Robinson has said he is open to the idea of possibly using Jackson in that spot at times.