Birmingham directors David and Ralph Gold, David Sullivan, Karren Brady and Roger Bannister have agreed to sell 29.9% of the club's shares to Hong Kong businessman Carson Yeung.
The Golds and Sullivan have each agreed to sell 14.81% of the club's shares to Grandtop International Holdings Limited while Brady has agreed to part with 0.23%.
Fellow director Bannister completes the agreement, offering to sell 0.05% and all shares will be priced at the ordinary share capital of 61.331 pence.
Yeung heads GIHL and has until 5pm on July 16 to to complete the deal.
Yeung's company look set to go through with the purchase having already paid a non-refundable deposit of £1.09million - an amount that will be deductible from the final payment should it proceed.
If GIHL did buy the maximum 29.9%, Yeung would instantly become the single largest stakeholder, taking over from the Gold brothers and Sullivan who currently own 78% of the shares between them.
In the new arrangement the Gold brothers and Sullivan would see their stake fall to 23.22% each.
Brady's revised holding would be 0.54% and Bannister would retain 0.11%.
Although the club were keen to stress that GIHL were stopping short of launching a full-scale takeover - as had earlier been mooted - it seems highly possible that Yeung will look to increase his holding further, with a 30% stake enough to trigger a bid for complete control.
A statement to the stock exchange said: 'Shareholders should be aware that there is currently no indication at this stage that a formal offer will be made for the company as a whole but discussions are continuing with GIHL which may or may not lead to a cash offer being made for the the company in due course.'
Blues manager Steve Bruce is continuing with his transfer plans amid the news and is poised to sign midfielder Olivier Kapo from Juventus in a £2million deal.
Kapo, a France international, is holding talks with talks with Blues after the two clubs agreed a fee.
City are also close to confirming Scotland striker Garry O'Connor's £2.6million move from Lokomotiv Moscow.
With his move from Lokomotiv Moscow set to be rubber-stamped, O'Connor spoke of his delight at the chance to impress in the Premier League.
'I'm delighted to be back in Britain, for my family, to be back and happy and enjoying my football again,' he told Sky Sports News.
'It's a fantastic opportunity to play against the best players in the world. I'm going to take that with both hands now.
'I'm sure I can give a lot to Birmingham, I'm ready to listen to what the coaches have got to say and I hope I can work my way into the team and show I'm a good player.
'I'm looking forward to working with Steve Bruce and Eric Black, I'm sure they can bring things to my game.
'It's the right time for me to move back and to be moving back to the best league in the world.'
He added: 'It's the best move possible. My wife is buzzing. I'm just looking forward to us being a family again. I've missed my son growing up and want to enjoy the family.'