Bell, 25, joined the Canaries in July last year and was prevented by an ankle injury from making his debut until October. With a number of wide players in the squad, including Lee Croft and Wes Hoolahan, Bryan Gunn decided to cash in on the man signed by Glenn Roeder from Luton Town.
City have already signed midfielder David Carney on loan from Sheffield United for the season, and may need to free up funds to sign reinforcements in attack and defence.
Gunn revealed that Bell was keen to move closer to his family in the Midlands. He has signed a three and a half-year deal with the Sky Blues and goes straight into the squad to face Derby tomorrow.