McLeish revealed the Blues board had exceeded the budget laid down for the new season in trying to sign Michel.
The former Scotland boss believes Michel will enhance his squad after spending about £10 million so far on players since City gained promotion from the Championship.
McLeish said: "Will Michel be the end of spending? I would think so because we have pushed the boat out for this.
"Despite the fact that we have already gone over budgets. I appreciate the board doing this - but it's not done yet.
"I don't know how far the dialogue has gone. This is the time where I let the board do their job. I don't get involved in that until such time where I say 'we've got a deal' or 'we've not got a deal'.
"Michel is being courted by Spanish clubs but the boy has hung on. He knew of our interest and he wants to come to England.
"I think Sporting Gijon would still be in the loop. They would want to keep him.
"They know that if he does stay at Sporting Gijon then they will have to give him a new and improved contract. His first option is to come to England."
McLeish has revamped his squad this summer but warned that is no guarantee Birmingham will survive because their spending power is still behind that of many clubs.
He said: "I think we spent about £10 million on fees and, when you add wages to that, from the free signings and the Bosman signings, then our spending is quite significant.
"But it is all relative to what we are going to face in the Premier League because we are still behind most of the teams, on the quality and financial side."