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Birmingham boss Alex McLeish wants to sign Arsenal defender Armand Traore on a season-long after sealing a similar deal for Manchester City goalkeeper Joe Hart.
Traore, 19, is the third-choice left-back at Arsenal and spent last season on loan at Portsmouth.
McLeish completed the signing of Ecuador defender Giovanny Espinoza in a £385,000 deal from Barcelona Sporting Club and had an improved offer of £5m for Roger Johnson accepted by Cardiff.
Birmingham will pay an initial £3m for Johnson with the rest spread over two years. Cardiff had rejected two offers for the 26-year-old, who has expressed his desire to play in the Premier League, but have now given him permission to open talks.