The attacking midfielder will leave Blues following our final league game of the season.
Bellingham, who earlier this month signed a professional contract with Blues, said: "I can’t thank Birmingham City enough for what they have done for me, not just this past year but since the age of seven.
"Of course I wish everyone associated with the Club nothing but the best. Once a blue always a blue.
"However, I’m incredibly excited to have joined one of Europe’s biggest clubs. The direction they are heading in and how much they help to improve young players made it an easy decision for myself and my family.
"I can’t wait to perform in front of all the fans when they are back inside one of the most beautiful stadiums in the world."
Bellingham embarked on a thrilling rise through the Blues Academy ranks after joining as an Under-8.
His professional debut came in August at Portsmouth in the Carabao Cup - making him Blues youngest ever player aged 16 years and 38 days, surpassing Club legend Trevor Francis' record.
And this season the England Under-17 international has been outstanding in the Championship, playing in a variety of different positions. He has scored four times from 40 appearances to date in the league.
Dong Ren, Blues CEO, commented: "Jude is an outstanding young player who has the ability, focus and desire to go to the very top. He is also a mature, well-rounded and intelligent young man who acts with the greatest of professionalism both on and off the pitch. It has been a pleasure to watch Jude develop into the player he is today and he will go down in the history of this Club.
"We have always understood that such a talent would be coveted by some of the world's biggest sides and I wish to thank Jude and his family for the way in which they have handled this situation.
“I also wish to personally thank the staff at the Club, and particularly those within our Academy, who have worked alongside Jude over the last eight years. A lot of effort, time and love goes in to developing a player like Jude and it is important to acknowledge the role that each and every individual has played in supporting the player we see in front of us today.
"We are naturally sorry to see one of our own leave but we have no doubt this is just the start of what will be an outstanding career. We wish Jude every success for the future and will continue to support him every step of the way."
Dortmund confirm that Bellingham will be part of their First Team squad 'from day one' and he will continue to wear shirt number 22.
Birmingham City would like to wish Jude every success in this next step of his career.
Throughout his time with the Club, all the way through the Academy to the First Team, he has not only treated us to his extraordinary ability but an exemplary attitude and character.
We are proud to say such a fine young man will always be part of the Birmingham City family.