The projects include £70 million for hospitals in Swansea, £26 million for low-carbon buildings and £42 million for 500 affordable homes around Wales.
The funding will allow housing associations to make the most of current opportunities and buy units from private contractors.
It will also provide help to the construction industry, providing cash flow and supporting jobs in the construction industry and the supply chain.
Mr Davies said the money was a £350 million boost for the Welsh economy.
He said: “This investment shows how joined-up government can be responsive to the current economic climate and react to what Wales needs. Using all the resources available to us we will do all in our power to deliver 6,500 extra affordable homes, as set out in the ‘One Wales’ programme for government. This money will have a real impact, providing assistance when it is most needed.”