Hancox and the Club part on good terms and both understand that such a move is part and parcel of the game.
Hancox wants regular First Team football and manager Gary Rowett cannot guarantee him such.
Last week, Hancox admitted that he would have to consider his options after a regular diet of Under-21s action this season, punctuated with a loan spell at Crawley Town.
The 22-year-old was Blues' longest-serving player having joined the Club as an eight-year-old.
After working his way through the Academy, Solihull-born Hancox signed his first professional contract in 2012.
His First Team debut arrived in August 2012 when he came on as a late substitute in Blues' Championship defeat to Huddersfield Town at St. Andrew's.
Since that first outing, he has gone on to make another 39 appearances in royal blue. However, his chances at left-back became limited since the arrival of Jonathan Grounds.
A combative and determined full-back, who never gave less than 100 per cent, Hancox spent a successful period out on loan at Crawley earlier this season where he made 16 appearances and scored twice.
Hancox leaves Blues with the thanks of everyone who has worked with him at the Club and with best wishes for his future footballing career.
He has handled himself with the utmost professionalism during his time here, not least in recent months when it became increasingly likely a parting of the ways would occur.