Steve Bruce has been named as the new manager of Wigan Athletic after Birmingham City agreed to release him from his contract. Bruce, who had 19 months left on his deal at Birmingham, seemed destined for the exit at St Andrew's ever since Wigan made their interest clear.

It will cost the Barclays Premier League's second-bottom side the best part of £3million to get their man but Dave Whelan, the chairman, believes it will be money well spent if Bruce keeps them in the top flight for a third successive season.

"When Paul Jewell decided he was not going to come back I was a little bit disappointed but Steve Bruce is the guy we wanted," Whelan said.

"I'm delighted we've got him, I think he's a big loss for Birmingham and a big signing for Wigan Athletic."

Bruce replaces Chris Hutchings who was sacked two weeks ago after Wigan slumped to 19th place in the Premier League, after registering just two league wins in 13 games. The former Manchester United defender has a huge task on his hands but the chairman expects him to lead Wigan to safety.

Whelan added: "He'll be a fantastic signing for Wigan Athletic. He's one of the best young managers in the land, I'm delighted we've got him and he'll bring enthusiasm, knowledge and spirit to our team."

"We have a good team now, we have some good players. We've had some bad luck with injuries and when Steve comes in he I know he will want a midfield player and maybe a striker - and I will be backing him exactly the same way I did with Paul Jewell."

Whelan also confirmed the compensation package for Bruce, saying: "We've got to do the right thing for Birmingham and David Sullivan has been a good and honest man all through the dealings."

Wigan will also try to persuade Birmingham to allow Bruce's assistant Eric Black to join him at the JJB Stadium.

"I understand Birmingham have got a short-term problem in that there is uncertainty in terms of who is going to own the club - if people want to buy the club they should get on and do it," Whelan said.

"But we would like Eric Black to come as our assistant manager, I am confident we will get him but I understand he has got to stay there for a week or a fortnight. But he will be coming to us."

Bruce had been in charge at St Andrew’s for almost six years, but Birmingham have lost five of their past six league games and had admitted that the hold-up over the club’s takeover had proved unsettling.

Bruce briefly managed Wigan in 2001 when he led them to into the third tier play-offs before leaving to take charge of Crystal Palace.

Whelan added: "I was annoyed when he walked away but I didn't give him a contract and he came for the last six weeks of season.

"He did a super job and got an offer from Crystal Palace which he wanted to take. I was disappointed to lose him but I'm delighted he's come back to us."

Paul Jewell, who resigned as Wigan manager at the end of the last season, admitted he rejected an "unbelievable" offer to return to the club, while Graeme Souness and Joe Royle had also been linked with the position.

Chris Hutchings, Jewell's assistant, stepped up to replace him but was fired with the team languishing at the foot of the table.