The service, held at Brangwyn Hall, was attended by former Lions captain Willie-John McBride, Scottish Rugby Union chairman Ian McLaughlin and former International Rugby Board chairman Syd Millar.
Other stars of the rugby world including Clive Rowlands, Mike Burton and All Black legend Brian Williams paid their respects to the former Welsh No. 8.
Known throughout the rugby world as ‘Merv the Swerve’, Davies captained the Welsh side to the Grand Slam in 1976.
The former London Welsh and Swansea No. 8 won 38 caps and toured with the British and Irish Lions to New Zealand in 1971 and South Africa three years later, featuring in eight Tests.
Davies passed away earlier this year following a battle with cancer.
The service in his memory was organised by the Welsh Rugby Former International Players’ Association with support from Swansea Council and Swansea RFC and included a choir who performed Calon Lan, Swansea Town and Bread of Heaven.
The association’s founder, JJ Williams said: “Mervyn was an icon of world rugby, one of the greatest forwards Wales has ever produced and one of the greatest of all-time.”
Derek Quinnell, a close friend of Mervyn, played with Davies on the British Lions’ victorious tour of New Zealand in 1971.
“Mervyn was a great character – a fantastic player. It was a privilege to play with him and he was very difficult to play against,” he said.
“I remember playing for the Barabarians against Swansea when Merv had just come back from London Welsh and Geoff Wheel was playing in the second-row for Swansea.
“I was at the bottom of a ruck after Mervyn had yet again tackled me. When everyone got up from the ruck, he just gave me a kiss on the lips.
“Merv was a fabulous man and a great friend.”