Forssell passed a medical this morning – which was thought the only potential stumbling block considering last season was ruined for him by injury – and has signed a three-year contract.

Manager Steve Bruce brought the Finnish striker to St Andrews on a season-long loan basis in summer 2003, and then secured a 12-month extension after that proved a success.

Forssell required knee surgery last autumn which brought an abrupt halt to his time in the midlands, but he returned to action for Barclays Premiership champions Chelsea before the end of the season.

The 24-year-old joined Chelsea from HJK Helsinki seven years ago, while Ruud Gullit was manager, but played little first-team football for the Stamford Bridge club.

He had loan spells at Crystal Palace, Borussia Monchengladbach and latterly Birmingham, and there was strong interest in him from within the Barclays Premiership and abroad this summer.

German giants Schalke were among the clubs to target Forssell, while Everton were also keen until pulling out of a deal due to concerns over his long-term knee injury.

Birmingham’s view is that Forssell’s problem can be managed given the right supervision from the club’s medical staff, and they are keen to pair him with Emile Heskey, last summer’s club record £6.25m signing from Liverpool.

Forssell was an outstanding success for City during the 2003-2004 campaign when he scored 19 goals – including 17 in the Premiership – when on loan from Chelsea.

His return to Chelsea action before the end of the season just ended was encouraging and timely, persuading Bruce to put Forssell top of his shopping list.

The Blues boss has been eager to boost his strikeforce ever since losing Forssell to injury last year, being thwarted in his efforts to sign Craig Bellamy in January when the Newcastle player opted to join Celtic on loan.

Bruce is also still trying to tie up a permanent deal for Walter Pandiani who joined Birmingham on loan from Deportivo La Coruna in the same transfer window.