Blues have called a press conference for mid-morning on Wednesday at St Andrews when McLeish is set to be named as Bruce's successor after quitting as Scotland manager.

Scottish Football Association chief executive Gordon Smith confirmed that McLeish submitted a written resignation.

The 48-year-old is expected to be unveiled as the new manager of Birmingham.

Smith said: "We are very disappointed to lose Alex as our manager."

McLeish arrived back in England this morning after overseeing the 2010 World Cup draw in South Africa and is understood to have held talks with City co-owner David Sullivan.

It is believed a deal has been struck to bring the former Rangers manager to the midlands club with McLeish more than doubling his current salary of around $800,000.

The compensation agreement with the Scottish FA is understood not to be a stumbling block and it will cost Birmingham around $2.5million for McLeish's services.

It will also mean McLeish renewing his rivalry with Aston Villa manager Martin O'Neill who was manager of Celtic when McLeish was in charge of Rangers.

Scotland just failed to qualify for the Euro 2008 finals and now face the prospect of finding another manager barely nine months after McLeish took over from Walter Smith who decided to join Rangers.

The fact that Eric Black, Bruce's number two at Birmingham, was allowed to leave earlier today indicated that a replacement had been lined up.

Black had been in contention along with McLeish but failed to get any assurances when he spoke to the Blues board about his future after Saturday's 2-0 home reversal by Portsmouth.

He now heads to the JJB Stadium to renew a partnership with Bruce which lasted two and a half years at City.

McLeish has a proven pedigree and would take control at the start of a massive month for Birmingham who have home matches against three of their fellow relegation candidates in Fulham, Reading and Middlesbrough during December.