The Danish forward will complete a move to St Andrew's once he has undergone a medical.
The 32-year-old was not offered a contract extension at St James' Park, and he will become Lee Clark's first signing.
Birmingham City statement: "Personal terms have been agreed with the former Newcastle United man and the 32-year-old is set to report to Wast Hills this morning (Monday) ahead of the Blues squad returning for 2012/13 pre-season training.
"Lovenkrands will undergo a medical today and Lee Clark hopes to confirm the great Dane as his first signing as Blues boss."