The Egypt midfielder, 25, has signed a three-year contract at St Andrews after the transfer of Spurs and Egypt striker Mido to City fell through due to personal terms. There is an option included for a further two years.
"The signing of Hossam is an excellent acquisition," Birmingham manager Steve Bruce told the club's official website.
"I was always very impressed with him whenever I watched him play for Spurs last season.
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"He has all the credentials that we are looking for in a player: he is only 25, a very talented international who still has the hunger to succeed in the Premiership.
"As well as being technically gifted, Hossam can also stand up to the physical side of the game so he will give us that extra competitive edge in midfield.
"We are delighted to have him on board.
"With the loss of Stephen Clemence, he will play a vital role in the middle of the park for us this season."
Clemence left for fellow midlands club Leicester City this summer after Blues secured their place in the Premiership with a second-placed Championship finish.
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