The Finnish international striker, who is on-loan from Chelsea, took his goal tally to nine in 15 starts with Birmingham's third after 78 minutes.
Republic of Ireland international striker Clinton Morrison, back in the side after a long battle to recover from a dislocated shoulder, and Stephen Clemence struck in the first half to stun Rovers and put Birmingham in control.
Bryan Hughes then completed the rout six minutes from time as Birmingham gained sweet revenge for being hammered 4-0 by Blackburn at St Andrew's last month.
It also made a bit of history for Birmingham boss Steve Bruce who reached the fourth round for the first time in his managerial career.
Blackburn never looked capable of reproducing their league victory and could easily have slipped to a heavier defeat.
After the game was delayed for 35 minutes by floodlight problems, Birmingham were initially indebted to goalkeeper Maik Taylor for preventing them falling behind in the seventh minute.
Blackburn striker Andy Cole left Robbie Savage and Kenny Cunningham in his wake only for Taylor to save his close-range shot at the near post.
It proved to be a rare moment of menace from Blackburn as Birmingham had threatened three times through Rovers' old-boy David Dunn and Bryan Hughes before Morrison made their pressure pay in the 23rd minute.
Forssell and Hughes showed a clean pair of heels to the Blackburn defence. Hughes fed a neat pass into the path of Morrison who pushed a low shot from 18 yards past goalkeeper Brad Friedel to score his second goal in his last three starts.
Birmingham doubled their advantage 13 minutes later after another neat move cut the Blackburn defence apart.
This time, Forssell was the provider, rolling a pass across the face of the area for Clemence to drill another low shot past Friedel.
Blackburn boss Graeme Souness tried to plot a way back into the game by sending on Italian World Cup winner Dino Baggio at the start of the second half.
Baggio did make an impact and fired in two fierce drives that forced Taylor into a couple of spectacular saves.
But Birmingham continued to carry a major threat and only the woodwork saved Rovers after 54 minutes when Forssell saw his shot crash to safety.
Forssell was finally rewarded for his hard work 12 minutes from time when he raced on to a long clearance from Taylor and beat the offside trap before sliding his shot beyond Friedel.
Blackburn's dismal day was then capped by Hughes in the 84th minute. He capitalised on more good work from Forssell who picked out Morrison.
Morrison's pass along the face of the goal was then drilled home by Hughes from 12 yards.
Birmingham: Taylor, Kenna, Cunningham, Upson (Hughes 13), Lazaridis (Carter 45), Johnson, Savage, Clemence, Dunn (Kirovski 76), Morrison, Forssell. Subs Not Used: Bennett, John.
Blackburn: Friedel, Babbel, Todd, Short (Martin Taylor 52), Gresko, Neill, Flitcroft, Tugay, Mahon (Baggio 45), Cole, Gallagher (Yorke 59). Subs Not Used: Yelldell, Jansen. Booked: Tugay.
Attendance: 18,688.
Referee: P Durkin (Dorset).