Steve Bruce has finally been cleared to become the new manager of Wigan Athletic.

Bruce has reached a compromise deal with his former club, Birmingham City, which means he is now free to take up his duties at the JJB Stadium.

He was set to be unveiled as Wigan's new manager at a press conference on Wednesday, but the deal was put on hold because of a dispute over certain financial payments he had already received from City. The midlands club wanted Bruce to pay back money he had received in advance and now a compromise deal has been struck.

It means the former Manchester United captain will finally end his six-year spell in charge of Birmingham.

Meanwhile, sources close to Birmingham have played down speculation that Alex McLeish, the Scotland manager, is to become Bruce's replacement at St Andrews. Ladbrokes have closed the book on McLeish, who just failed to lead the Scots to the Euro 2008 finals after defeat in their final qualifying game against Italy. But City insist it will be at least another week before a new manager is in place and Eric Black will operate in a caretaker role for tomorrow's Premier League game with Portsmouth.

A source close to the club said: "Nothing as been finalised and people who suggest a deal has been done and dusted could end up with egg on their face."

Black, who played alongside McLeish at Aberdeen in the 1980s, has admitted to being "flattered" at being linked with becoming Birmingham's new manager. But he insisted: "Although a lot of people have said a lot of nice things, many of which have been very flattering, I am trying to stay focused on Saturday's game with Portsmouth and then we will see how we go."