Birmingham have offered new contracts to four players as they continue talks with goalkeeper Darren Randolph.
Wolves' Bakary Sako has revealed he is mulling over offers from the Premier League but is yet to decide on his future.
This season Tello has made 16 appearances in all competitions for Barca, having represented Spain at this summer's Olympics.
A Barcelona statement read: "Barcelona announce they have reached an agreement with the player Cristian Tello to extend his contract until June 30, 2016. His buy-out clause has been set at 10 million euros.
"The player will sign his contract on Monday, December 17, in the Barcelona offices."