Discussions are still in the early stages and all parties have signed confidentiality agreements, said the club's parent company Birmingham International Holdings in a filing to the city's stock exchange on Tuesday.
The latest talks come after the Hong Kong-based firm said in a statement last month that it had rejected an offer, from an unnamed party, which it deemed as "not attractive".
Local daily the South China Morning Post named the failed buyer as an Italian consortium led by Gianni Paladini, the former chairman of Premier League club Queens Park Rangers, which had offered £12 million ($19.2 million).
Birmingham City -- which was relegated from the Premiership last year, three months after winning the League Cup -- is owned by hairdresser-turned-football tycoon Yeung, who has been charged with money laundering in Hong Kong.
Yeung was arrested on five counts of offences in June last year after investigations revealed around HK$720 million ($93 million) passed through his accounts, but the exact nature of the allegations remain unclear.
Little known before his emergence in English football, Yeung took control of Birmingham in October 2009 in an £81 million ($130 million) takeover from David Sullivan and David Gold, now the co-owners of West Ham United.