The struggling Championship side are bracing themselves for bids from numerous Premier League clubs, after turning down several enquiries for the talented stopper in the summer.
Birmingham's crippling financial debts have been well-publicised over the past few months, and it's believed that a fee of £6million will be enough to spark Butland's departure from St Andrews.
Gunners boss Arsene Wenger wants a new addition to challenge current first-choice goalkeeper Wojciech Szczesny for the number one spot at the Emirates Stadium. Ideally, he wants a more experienced custodian, but 19-year-old Butland has been on Arsenal's radar for some time.
Brendan Rodgers is also keen on the upcoming England international, as speculation about Pepe Reina's long-term future at Anfield continues. However, both Arsenal and Liverpool will face competition for the teenager's signature.
Fulham and Southampton are also understood to have made a check on Butland's situation, as are Liverpool's local rivals Everton. As the transfer window kicks into action, a flurry of bids can be expected to ensue.
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