Birmingham are understood to have given manager Steve Bruce permission to speak to Wigan owner Dave Whelan.
Blues chairman David Gold, co-owner David Sullivan and managing director Karren Brady held an emergency board meeting this afternoon to discuss Wigan's approach.
The club are making no official statement but it is believed Bruce has been given the green light to hold talks with Whelan about becoming Chris Hutchings' replacement.
The former Manchester United skipper is expected to be confirmed as Wigan's new boss early next week when he returns from holiday in Dubai.
It will signal the end of Bruce's six-year spell in charge at St Andrews during which time he has twice led them to promotion to the Premier League.
But uncertainty over the future of the club has led Bruce to decide his future lies elsewhere.
The future of Bruce's assistant Eric Black has still to be decided and at the very least City hope he would remain at the helm until a new manager is in place.
Black, who has a 12-month rolling contract, is due back at the club after a short break on Monday.
He has made it clear that he also wants to accompany Bruce to Wigan even though he would have been a candidate to become the new manager at Birmingham.
Bruce will treble his weekly earnings - currently around £15,000 - by making the move to the JJB Stadium on a four-year contract.