Scotland manager Alex McLeish is the favourite with the bookmakers although City sources are insisting no deal has been finalised.

The midlands club are searching for only their fourth manager in the 14 and a half years since David Sullivan and David Gold took control.

Bruce has officially resigned after the contractual dispute with Birmingham over image rights was resolved to end his six-year reign at St Andrews, with his number two Eric Black given a caretaker role.

City, in a media statement, said: "The Birmingham board has appointed just three managers in the past 14 and a half years.

"Each of those managers made improvements on their predecessor and took the club forward.

"The board will appoint a new manager within the next week and is looking forward to working with someone who can have an equally positive impact."

McLeish, currently in South Africa for Sunday's World Cup draw, initially pledged his future to Scotland.

But City are refusing to give up hope of landing the services of McLeish who played alongside Black at Aberdeen.

Sullivan and Gold praised the contribution made by Bruce who twice steered the club to promotion to the Barclays Premier League.

The statement continued: "The board would like to take this opportunity to thank Steve for everything he has done whilst in charge at Birmingham City.

"He joined the club nearly six years ago and during that time the club has moved on and improved under his guidance.

"The board have enjoyed a terrific working relationship with Steve and he leaves with their best wishes and friendship."