The 33-year-old has joined the Seasiders on a two-year deal for an undisclosed fee.
Ferguson, who moved south from Rangers in 2009, helped Birmingham to victory in the Carling Cup final last season but wanted to move closer to his Glasgow family home.
Change of scenery: Barry Ferguson (right) has completed his move from Birmingham to Blackpool
The former Scotland international, who had 12 months left on his Blues contract, told Blackpool's official website: 'I'm delighted to be here and I'm raring to go.
'As soon as I spoke to the manager my mind was made up.
'I saw a lot of Blackpool last year and played against them as well and I was very impressed.'
Parting gift: Ferguson helped Birmingham win the Carling Cup with a 2-1 win over Arsenal at Wembley
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