The 26-year-old received a work permit and passed a medical on Monday to complete the formalities of the deal.
"He's an explosive type of player and is similar to Christian Benitez but with more experience," said Blues manager Alex McLeish.
"He has great pace, is two-footed, very good in the air and I'm sure he's a signing that will excite the fans."
Martins joins midfielder David Bentley and defender Curtis Davies as a new arrival at the Blues in January.
"I am certain these new additions will augment and supplement what we already have," Birmingham acting chairman Peter Pannu told the club's website.
"They will create some competition within the team for places, which benefits the whole squad."
Rubin coach Kurban Berdiyev said: "His child was born and he asked to let him go to England, because Obafemi wants to be closer to his family."
Nigeria international Martins, who has also played for Italian side Inter Milan, spent three years with Newcastle United.
He scored 39 goals in 105 games for the Magpies before leaving for German outfit Wolfsburg.
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