Stoke have made a bid for the highly-rated centre-back which Birmingham are believed to have accepted, but the player is holding out to see what comes of Chelsea and Arsenal's interest.
Chelsea boss Andre Villas-Boas has identified a new defender as one of his top transfer targets and he is thought to be keen on landing a British centre-half.
Bolton defender Gary Cahill has been mentioned as a possible target, but Dann is believed to be Villas-Boas' preferred choice.
Dann has established himself as one of the best young defenders in the country during the last two seasons and his absence from the heart of the Birmingham defence for the second half of last season through injury contributed to the club's eventual relegation.
The 24-year-old is keen to stay in the Premier League and Birmingham are resigned to losing their prized asset this summer.
A host of clubs have been credited with an interest in 6ft 5in defender Dann with Liverpool and Aston Villa also interested.
However, it appears Chelsea and Arsenal are ready to go head-to-head for the former Coventry man.
Arsenal manager Arsene Wenger has made a new central defender one of his top priorities and Dann is thought to figure highly on his wanted list.
Wenger is ready to firm up his interest in the accomplished central defender as he looks to add a dominant defender to his ranks.
Source: Team Talk
Source: Team Talk