Roger Johnson is poised to sign for Wolves in a £7m move after admitting Birmingham's relegation from the Barclays Premier League was a key factor in him wanting to leave St Andrew's.
The central defender held talks with Wolves officials at Molineux yesterday morning before undergoing a medical.
Wolves boss Mick McCarthy has been pursuing Johnson throughout the summer and has stepped up his efforts after losing out to Leicester in the race to sign Matt Mills from Reading.
Johnson said: "We're half-way there. It wasn't an easy decision. I enjoyed my time at Birmingham but relegation half made the decision for me.
"I want to be in the Premier League and I'm sure everyone can appreciate that. But I enjoyed my time at Birmingham."
City had initially been hoping to secure around £10 million for Johnson. But a compromise has been reached between the two clubs.
Lifelong Chelsea fan Johnson moved from Cardiff to Birmingham in a £5 million deal two years ago.
He quickly adjusted to the top flight and formed an effective partnership with Scott Dann, another Championship player with Coventry.
Meanwhile Aston Villa have reached agreement with Birmingham over the compensation paid to the Carling Cup holders following manager Alex McLeish's move across the city.
McLeish resigned as Blues boss after three and a half years at St Andrew's last month and eventually took charge at Villa as Gerard Houllier's successor.
Birmingham demanded Villa pay them compensation for the remaining two years of McLeish's contract and initially threatened legal action.
But the possibility of a battle between the two clubs has now been removed via confirmation in a statement issued by City.
Birmingham's joint first team coach, Peter Grant, and City's chief medical officer, Dr Ian McGuinness, are also moving to Villa.
The statement read: "Birmingham City and Aston Villa can confirm that agreement has been reached between the parties ending the legal disputes surrounding Alex McLeish's departure.
"Aston Villa has agreed to pay Birmingham City an undisclosed figure following negotiations whereby the parties have agreed to bring to an end all disputes, including the further recruitment of Peter Grant and Dr Ian McGuinness by Aston Villa."Reuse content