The Scot, 52, has been in charge of Brum since November 2007.
But he has tendered his resignation following City's relegation from the Premier League.
The club confirmed the news this afternoon with a short statement on their website.
It read: "Birmingham City Football Club can confirm that Alex McLeish has resigned as manager.
"Acting chairman Peter Pannu received an e-mail resignation from McLeish earlier today while away on business in Amsterdam.
"No further comment will be made at this moment in time and updates will be released in due course."
It increases speculation the former Rangers and Scotland boss is off to manage neighbouring Aston Villa after being made the bookies' favourite to replace Gerard Houllier.
Source: Mirrorfootball
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