F&C will give its name to the newly promoted club for the next three seasons, in a deal that formally begins in June. The contract includes shirt sponsorship and advertising at the St Andrews stadium.
Birmingham won automatic promotion to the Premier League after securing the second spot in the Championship. The Blues have been searching for a suitable benefactor since FlyBe announced it would not renew its sponsorship, ending a four year relationship with the team.
F&C has sponsored the union for football managers, the League Managers Association, for the last three years, and also partners Hibernian FC in Edinburgh.
John Yule, head of retail distribution at F&C, said: "Birmingham City has long been known as a very community focused football club whose brand values and aspirations to succeed, we believe, closely match our own.
"Football's popularity makes sponsorship a very powerful tool for raising the company's profile by offering unrivalled and unique brand awareness opportunities for more than 40 weeks a year on a local, national as well as an international level."
The asset management firm will also help fund Birmingham City's community programme, which was set up by managing director Karren Brady, and is aimed at helping children and single parents.
Brady said: "We have now reached the stage where a fresh, even more dynamic and lucrative sponsorship was essential to our continued development."