The Brum had been hoping to keep the 15-year old midfielder at St Andrew's but after a transfer request was handed in, the Second City outfit look unlikely to retain the promising talent.
The Daily Mail suggests that a compensation fee of £200,000 has been agreed between the two clubs with Nabay now set to depart Birmingham for manager Lee Clark's former club as a player.
"I made it clear to Foday in several meetings with him that he had the potential to become the youngest-ever player to appear for Birmingham City's first-team this season," said Clark.
"That's how highly I rated him. And how highly the club rated him. I wanted him to stay but as a football manager I couldn't have done any more."