Lee Clark will be named as the new manager of Championship club Birmingham City in the next 24 hours, according to reports.

Clark, 39, has been out of work since his surprising sacking from Huddersfield Town in February. The former Fulham midfielder was dismissed with the Yorkshire club fourth in the League One table.

He is expected to sign a rolling contract with Birmingham after receiving assurances that a transfer embargo imposed on the Midlanders will be lifted in the near future.

The Blues were hit with the embargo after filing their accounts late. Uncertainties remain over their financial situation, with players believed likely to be sold – midfielder Jordon Mutch has already moved to Cardiff – and the St Andrew’s chairman Carson Yeung facing charges of money-laundering in Hong Kong.

Clark will succeed Chris Hughton, who moved to Norwich City as Paul Lambert’s successor earlier this month.

He guided Huddersfield to third place in League One in 2010-11, only for them to suffer a comprehensive defeat in the play-off final against Peterborough at Old Trafford, and went on to mastermind a Football League record run of 43 domestic games unbeaten.

The Terriers won last season’s play-off final to gain promotion to the Championship under the management of Simon Grayson, who acknowledged the major role Clark had played in the success.