
The Scottish international had largely been a fringe player at Everton since his arrival from Motherwell in 2003.
Now, new Birmingham boss Alex McLeish - who coached the player at international level - has swooped for the 24-year-old Glaswegian.
The forward has signed a three-and-a-half year deal, with a further two year option after that, joining compatriot David Murphy of Hibs in being a winter signing at St. Andrew's.
McFadden, whose wonder-goal against France in the ill-fated Euro 2008 qualifiers caught the headlines worldwide, scored 18 goals in 139 appearances (including 79 starts) for Everton.
Alex McLeish will give a press conference later with regards to the signing.
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