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The teenager has reportedly been a Manchester United and Chelsea transfer target but now appears to be heading for Germany.
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Bellingham is unable to sign a professional contract until June 29, when he turns 17, but the deal is said to be all but completed.
Dortmund are set to pay a training compensation fee of around £20m and he will finish the season with Birmingham, who play in the Championship.
Bellingham went for a tour of United's training facilities in Carrington before the Covid-19 outbreak, but has instead opted for the Bundesliga side who are renowned for giving young players first-team opportunities.
Bellingham is expected to join up with fellow young stars Erling Haaland, Jadon Sancho and Gio Reyna in the senior squad early next month.
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