Stroud's departure from the Swedish club has been a formality for some time, with his contract at Mjallby due to expire at the end of the year.
Genoa had spent the past month being widely tipped as favourites to sign the 24-year-old, and several outlets reported an agreement in place with both Mjallby and the player himself. Genoa maintain that a pre-contract covering a future transfer had already been signed.
At the last minute, however, Hull City swooped in to complete the deal instead, with Stroud expected to sign for the newly promoted Premier League club shortly. Mjallby are set to receive a fee of around £3m for their departing star. Sky Sport Italia has since reported that Genoa intend to pursue legal action against Stroud's representatives, arguing the switch to Hull breaches the agreement the Serie A club believed was already in place.
Hull City owner Acun Ilicali confirmed that Stroud, along with midfielder Oscar Zambrano, is close to completing a move to the club.
"They are very close," he told Hull Live. "I can't say that anything is 100% certain, but we are very, very close. We can say that we've now started our recruitment and we expect two more in the near future."
Stroud has made a rapid rise through Swedish football, having previously helped Mjallby win their first-ever Allsvenskan title before adding the Svenska Cupen this year. He has scored 19 goals and provided 13 assists in 85 Allsvenskan appearances for the club, form that also earned him a place in Sweden's World Cup squad this summer.
The legal threat from Genoa adds an unusual twist to what would otherwise be a straightforward late hijacking of a rival's transfer target, and could complicate matters for Hull City even if the move for Stroud goes through as expected.
For Mjallby, losing their captain marks the end of an era after the club's historic title win, though the fee will provide useful funds as they look to build a squad capable of competing in Europe next season.