Dortmund reportedly paid an initial €23million (£21m) to sign the Bellingham, making him the most expensive 17-year-old in history.
The England youth international bid an emotional farewell to Birmingham following their 3-1 loss to Derby County on Wednesday.
Bellingham became Blues' youngest ever player when he made his debut last August and went on to make 44 appearances for the club.
In a statement published on Thursday, Birmingham said: "In such a remarkably short space of time Jude has become an iconic figure at Blues, showing what can be achieved through talent, hard work and dedication.
"His caring, humble and engaging off-the-field demeanour has also made him such an impressive role model.
"The 22 shirt has become synonymous with Jude, his rise to the first team aged just 16 years and 38 days and these qualities.
"And as such the club have decided it would be fitting to retire this number, to remember one of our own and to inspire others."
Bellingham will wear the number 22 at Dortmund and will link up with his new team-mates on July 30.