Birmingham boss Steve Bruce said: "We have agreed a fee with Coventry and Notts Forest and have now left it up to the lad. Over the weekend, I'm sure he'll make his decision.
"Stern has done a fantastic job for this club and he got us into the Premiership with eight goals in 15 games when he arrived here for £100,000 from Notts Forest.
"He got the winner at Millwall in the play-off semi-final and also set up Geoff Horsfield for a goal in the final.
"It's a big wrench that he is leaving but with the addition of Dwight as the fifth striker he is going to be limited."