Davila, who departed Wellington Phoenix in early June, had long been linked to the Bulls and will be Macarthur's chief playmaker until the end of the 2023-24 season.
"Watching [Macarthur] last season, I was very impressed with their debut in the league," Davila said. "I enjoyed watching them play and I could see how they play football, is how I like to play -- exciting."
Davila was superb across his two seasons at Wellington, including captaining the Phoenix in 2020-21 and is set to play a key role in Macarthur's bid to kick on from a semifinal appearance in their inaugural season.
"There is no doubt he will be an important addition to our squad, building on the foundations we have put in place in our first season," Bulls coach Ante Milicic said.
"We know how dangerous he can be and I'm looking forward to seeing what he can bring to our club."