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Aston Villa boss Gerard Houllier has confirmed that Curtis Davies is set to join Birmingham.
The 25-year-old centre-back is on the verge of signing a three-and-a-half-year contract with Blues for a fee believed to be around £3.5million.
The former England Under-21 international looked to be on his way to Leicester on Tuesday, revealing on his personal Twitter account that a return to the Foxes was imminent after a successful loan spell with Championship outfit this season.
But Blues boss Alex McLeish stepped up his interest and Davies chose to go for another chance at Premier League football.
"He is on his way out to Birmingham," said Houllier. "He had the option to go to Leicester or to Birmingham and he has opted for Birmingham. I think he is sold.
"He is a nice lad but, as you know, we have four centre-backs in James Collins, Richard Dunne, Carlos Cuellar and Ciaran Clark.
"He was not getting enough time to play. I understand that."
Davies will become the third player in Blues' squad to sign directly from Villa after Liam Ridgewell and Craig Gardner also switched across the second city.
The former West Brom defender made an £8million move to Villa in July 2008 after a successful spell, forming a partnership with Martin Laursen that was good enough for Davies to be named in the senior England squad for their friendly against Germany in November 2008.
But Davies' form dipped after Laursen was forced to hang up his boots during the summer of 2009 and he slipped down the pecking order after the arrival of Dunne and Collins.
McLeish has been keen to sign a new centre-back after Scott Dann was ruled out for the season with a hamstring problem.
West Brom had spent £3m to sign Davies in August 2005 after helping Luton win League One and he became the Baggies' skipper, but he angered fans when deciding to leave for Villa.
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Team news for the Championship clash between Birmingham and Cardiff at St Andrew's on New Year's Day.
Bolton put the disappointment of back-to-back defeats behind them with a 3-1 victory over struggling Birmingham.
Birmingham manager Lee Clark was angry with his side after the 3-1 defeat at Bolton.
The top three in the Championship all won, while Barnsley dropped to the bottom of the table.
Jack Butland may have to leave Birmingham in January in order to keep the club out of administration.