McLeish leaves Scotland for Blues
The Blues have called a news conference for Wednesday, where they are expected to unveil the 48-year-old McLeish.
Appointed in January 2007 with a deal running until 2010, McLeish came close to taking Scotland to Euro 2008.
Scottish Football Association chief executive Gordon Smith told BBC Radio 5 Live: "We weren't going to allow him to speak to the club." <!-- E SF -->
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<!-- E IMED -->The Blues, who received �3m when Steve Bruce left for Wigan, are believed to have agreed a compensation package with the SFA.
"Alex had a contract for another two years until 2010 and we were willing to give him another two years with a much better financial deal," said Smith.
But, despite the prospect of an improved deal for McLeish, the lure of the English top-flight has proved too great for the former Rangers, Hibernian and Motherwell boss.
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Smith added: "He has been a terrific manager for Scotland and a great asset to the association.
"He's also been working in other aspects within the SFA, and he's a big loss."
A hint that the Blues had got their man came when caretaker assistant Eric Black quit on Tuesday to join Bruce at Wigan.
"I understand that McLeish agreed to join Birmingham soon after getting off the plane from South Africa this morning where he had been representing Scotland at the World Cup draw," said BBC 5 Live sports reporter Pat Murphy.
"Compensation isn't a problem. The SFA will receive around �1m for releasing McLeish.
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"McLeish has long hankered after managing a club in the Premier League and he was interviewed for the West Brom job three years ago.
"His playing credentials as a lion-hearted defender, capped 77 times by Scotland, and his clutch of trophies picked up as Rangers manager will guarantee him respect in the Birmingham dressing room."
The SFA will now hold a meeting on Wednesday to discuss who will
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McAllister is the bookies' front-runner and is closely followed by Davies, who was sacked by Derby this week.
Former Scotland skipper McAllister has not been involved in management since he left Coventry in January 2004.
Other names in the frame include former Rangers boss Graeme Souness, Dundee United's Craig Levein, Tommy Burns, Joe Jordan and Kenny Dalglish.
http://news.bbc.co.uk/sport2/hi/football/internationals/7115715.stm
I'd take Levein at a push