Spanish side Osasuna claimed that before signing for Blues the 22-year-old striker had already signed for them, a claim disputed by both Blues and the player himself.
Football's governing body, FIFA, then decided to investigate the transfer and on Tuesday ruled that Figueroa is a Blues player.
"Osasuna claimed that I had signed a contract with them but that is not true, Figueroa told the clubs official website, www.bcfc.com
"FIFA have finally agreed and I am glad the situation has now been resolved.
"I have no regrets about coming to England rather than Spain and I am looking forward to playing in the first team for Birmingham."
The Agentinian striker is yet to start a Premiership game for Blues so far this season but his goalscoring feats have seen him net seven times in eight reserve team outings.
Figueroa Transfer Dispute Resolved
