The Premier League club said in a statement that the 19-year-old, a member of the latest England squad, will stay at second tier Birmingham until the end of the season.
Butland's arrival at Stoke could herald the departure of fellow keepers Asmir Begovic or Thomas Sorensen.
Stoke also made a move on transfer deadline day for United States winger Brek Shea, 22, who signed for 2.5 million pounds from FC Dallas while they let ex-England defender Matthew Upson join second-tier Brighton and Hove Albion.
Get the best features, fun and footballing frolics straight to your inbox every week.
Thank you for signing up to Four Four Two. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.