Stewart has just 12 months left on his current contract with the Scottish club, and has turned down the chance to extend this beyond next summer.
The Dundee leaders have made a stance in recent weeks along with manager Paul Hartley that the player would leave on the cheap, but it seems they may back down to Birmingham City’s demands.
Stewart is now the favourite with the bookies to become a Birmingham City player in this transfer window. This will come as a blow to Leeds United and also Blackburn Rovers who were keen to sign the forward.