The Moroccan giants moved quickly to fill the vacancy after confirming Davids' exit on Friday morning, with only seven matches remaining in the Botola Pro season.
Nabi immediately emerged as Raja's preferred candidate as the Casablanca outfit accelerated talks in a bid to finalise an appointment within 24 hours.
Negotiations progressed rapidly and personal terms were agreed, but the move briefly encountered complications upon the Tunisian mentor's arrival in Morocco. Reports suggested discussions stalled due to disagreements over the proposed contract duration.
With uncertainty surrounding the deal, Raja explored contingency options. Club legend Youssef Safri and former Wydad Athletic Club coach Sven Vandenbroeck were identified as alternative candidates and were contacted by the club.
Despite the temporary setback, Raja and Nabi eventually reached common ground later in the evening and completed the agreement.
The club confirmed that Nabi has signed a one-year contract with an option to extend, placing him in charge for the remainder of the season and the club's longer-term rebuilding plans.
"Welcome home, Nasreddine Nabi," the club wrote on X.
The appointment offers Nabi an immediate opportunity to relaunch his coaching career following a mixed spell in South African football with Kaizer Chiefs.
Having previously enjoyed success in North African football and built a reputation for his tactical approach, expectations will now be high for the Tunisian to deliver results quickly at one of Morocco's biggest clubs.
Attention now turns to whether Nabi can make an instant impact and guide Raja through a strong finish to the campaign.