Ferguson made an emotional farewell at the Scottish Cup final
Barry Ferguson admits it was upsetting to leave Rangers but thinks it was best for him and his beloved club that he signed for Birmingham City.
The midfielder, 31, has spent most of his career at Ibrox but has moved for £1.2m after falling out of favour following misbehaviour last term.
"It's a bit of a sad day for me really," he told Rangers' website.
"I have left Rangers with no hard feelings. It's the best thing for both the club and myself."
Ferguson was fined and stripped of the Rangers captaincy by manager Walter Smith last season after a breach of discipline while on Scotland duty.
It also led to national manager George Burley ending his former captain's international career.
Alex McLeish has put a lot of faith in me again and I want to repay that by doing well for him at Birmingham
Birmingham City midfielder Barry Ferguson
He returned to the Rangers side at the end of the season as they clinched the double of Scottish title and Scottish Cup.
And, despite rival interest from West Brom, it was former Rangers manager Alex McLeish who decided to give Ferguson a second chance in England's Premier League.
"It's a great challenge for me to be going back to the Premiership," said Ferguson, whose career at Ibrox was interrupted by an 18-month spell with Blackburn Rovers.
"I am going to work again with a manager who has been my gaffer at club and country level and I have a lot of respect for him.
"He has put a lot of faith in me again and I want to repay that by doing well for him at Birmingham."
Ferguson had left Rangers for Blackburn for £7.5m in 2003 but returned 18 months later for £3m less after a spell in England's top flight that was hampered by injury.
"I have to say that it's all a bit surreal, but that's life," he said of his second departure from Ibrox.
"I've been at Rangers since I was a kid and, bar a year-and-a-half at Blackburn, it's been my entire life.
"The club will always be in my heart. The people who know me know exactly what Rangers always meant."
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