He passed Waters comfortably in the first two qualifying stages, falling just a hundredth of a second behind Davison in Q2.
Dick Johnson Racing then turned the tables on his rival with a Q3 fastest 1m01.998 – the first ‘one’ of the weekend – keeping the pole by just six percentage points.
This came on the first lap of his final run, though Waters planned to wait until the second lap to attack first.
“It was a great lap. I knew we had one,” Waters said.
“I thought I was going to make lap 2, but I had half a crack and I was up, and I was like, ‘Am I back or am I not back?’ I thought.
“Lucky I didn’t back her up and finished the lap. Every session the speed of the car got better and better.”
Davison will start on the outside of the front row ahead of Chaz Mostert and Anton de Pasquale.
Andre Heimgartner was fifth fastest, the best placed Kiwi, while Scott Pye comfortably led the way for Group 18, 12 points ahead of Mark Winterbottom.
Sean van Gisbergen could only manage seventh on the grid, a place clear of team-mate Brock Feeney, as James Goulding was the surprise of the season as the Premier Racing driver moved into Q3 before securing ninth place.
James Courtney rounded out the top 10.
Nick Perkat, meanwhile, was the unlucky driver to be left on the bubble in Q3, a gamble on used rubber costing him 11th.