The former Newcastle boss was today confirmed by the midlands club as McLeish's replacement.
Birmingham replace McLeish with Hughton as manager
Hughton, the former Newcastle boss, was today confirmed by the midlands club as McLeish's replacement.
Hughton edged ahead of Roberto Di Matteo in the battle to take charge of the Carling Cup holders.
A statement on the club's official website confirmed that Hughton will take charge of the Blues immediately and they will be hoping he can repeat his achievement at Newcastle in steering them to promotion from the Championship two years ago.
Hughton has been out of football since parting company with the Magpies after a 3-1 defeat at West Brom in early December.
But he has impressed Birmingham acting chairman Peter Pannu when being interviewed during the past few days.
Di Matteo, sacked as West Brom head coach in February, was the other major candidate.
City's Hong-Kong based owner, Carson Yeung, ratified Hughton's arrival at St Andrew's.
It will be Yeung's first managerial appointment since taking control of Blues during the early part of the 2009-2010 campaign.
Yeung is looking for Blues to regain their Premier League status at the first attempt.
This was made clear to McLeish in a statement issued at the end of the season after defeat at Tottenham doomed them to relegation.
Hughton spent 13 years as a player at Tottenham and then had spells as coach and assistant-manager at White Hart Lane between 1993 and 2007.
He was appointed first team coach at Newcastle in 2008 and was appointed manager in October 2009.
But, despite guiding them to promotion, Hughton was sacked 14 months later.
One of his first tasks will be to try and persuade the likes of Ben Foster, Roger Johnson, Scott Dann and Craig Gardner to stay.