The former Huddersfield manager will take the up the post after the departure of Chris Hughton as the club struggle to keep hold of their key playersLee Clark has been announced as the new Birmingham City manager as the club conclude their search for Chris Hughton's successor, following his move to Norwich City.
As Goal.com reported earlier on Tuesday, the West Midlands club have opted to go for the former Huddersfield boss who impressed chairman Peter Pannu during two sets of interviews and has been encouraged to offer him the role.
However, with the club's increasingly worrying financial situation and a mass exodus of their best players likely, the 39-year-old former Newcastle and Sunderland player will have a mountain to climb from the beginning.
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The Blues - who reached the play-offs last season - had interviewed a number of candidates following the departure of Hughton, with Alan Curbishley and Roy Keane reportedly linked to the vacancy, but both are believed to have turned it down due to the rumours of no transfer budget and the potential departure of players.
Jordan Mutch was sold to Championship rivals Cardiff City last week, while Ben Foster is set to join West Brom following his loan spell at the Hawthorns last season.
Curtis Davies has been linked with a move to join former manager Hughton at Norwich and Southampton are chasing promising goalkeeper Jack Butland, who was included in Roy Hodgson's England squad at Euro 2012.
As Birmingham manager, Clark will face his former club Huddersfield in the Championship next season after the Terriers won promotion through the League One play-offs.