Birmingham will be allowed to compete in the Europa League next season after being granted a UEFA licence.
There had been speculation the award could be under threat because of Blues' financial situation, though the club themselves always maintained it was not a concern.
Acting chairman Peter Pannu told the club`s official website: "This means we can all focus on what are really exciting times for the club.
"We have three important Barclays Premier League games remaining and we can take this good news into them, starting at Newcastle on Saturday.
"Then we can all look forward to competing in the Europa League alongside some of the continent's finest clubs. Being granted the licence - which we were always confident of achieving - will put to rest once and for all some of the scaremongering that has surrounded the club."
Blues qualified for the Europa League by beating Arsenal in the Carling Cup final.