Davies, who has been the MP in Vancouver East since 1997, announced in December she will not run again.
Kwan, a former Vancouver city councillor, has represented Vancouver-Mount Pleasant in the B.C. legislature since 1996.
At her announcement Sunday, Kwan was joined by community leaders including Grand Chief Stewart Philip and NDP political strategist Bill Tieleman.
During her speech, Kwan drew on her East Vancouver roots calling it a community "where everyone makes a contribution whether it’s immigrants, new Canadians, retirees, young people working to make their start, artists and writers, from the creative community who feed our soul, or people who are homeless grappling with addiction issues, or mental health challenges, or grassroots activists, and there are many of you in this room who give strength to fight for a better tomorrow," she told them.
Disneyland trip haunts Kwan's nomination
Afterwards reporters asked Kwan about last spring's personal scandal in which she wound up repaying $35,000 for European and Disneyland trips for her family, initially paid for by the Portland Hotel Society.
"That was a deeply personal issue and was very difficult," she told reporters, "there’s no question about it."
Kwan said she had trusted her husband Dan Small, who was a director with the Portland Hotel Society, when he told her that he had paid for the family's personal expenses on a business trip to Europe in 2012.
"When I found out the trips that I had thought were taken were not paid for, I went and borrowed the money and immediately paid it back. And I think what I’ve heard in the community and what people have said to me is they want me to move forward and to seek the nomination."
In December, NDP MLA Mabel Elmore also announced she would be seeking the NDP nomination in the same riding. Elmore has represented Vancouver-Kensington since she was first elected in 2009.