Alex McLeish is expected to be named Birmingham City manager next week.
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.
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 Eric Black at Aberdeen.
David Sullivan and David 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."