The Oakwell outfit started to work on a loan swoop for Cosgrove at the start of deadline day and have made progress.
Cosgrove wants regular game time that he will not get at Birmingham and is keen to make the right move before the window shuts.
He turned down a move to Charlton Athletic, but wants to join Barnsley and head to Oakwell.
Now the deal is on course to be completed, taking Cosgrove from Birmingham and into League One with Barnsley.
Barnsley will be hoping to see the striker quickly find his feet in League One and start scoring.
Cosgrove was on loan at Plymouth Argyle last season and grabbed eight goals in 33 outings.
The 26-year-old is into the final year of his contract at Birmingham, who he joined from Aberdeen in 2021 for £2m.