The recent adaption of virtualization technologies in the next generation mobile network enables 5G base station to be segregated into a Radio Unit (RU), a Distributed Unit (DU), and a Central Unit (CU) to support Cloud based Radio Access Networks (C-RAN). RU and DU are connected through a fronthaul link. In contrast, CU and DU are connected through a midhaul link. Although virtualization of CU gives benefits of centralization to the operators, there are other issues to be solved such as optimization of midhaul bandwidth and computing resources at edge cloud and central cloud where the DUs and CUs are deployed, respectively. In this paper, we propose a dynamic functional split selection for the DUs in 5G C-RAN by adopting to traffic heterogeneity where the midhaul bandwidth is limited. We propose an optimization problem that maximizes the centralization of the C-RAN system by operating more number of DUs on split Option-7 by changing the channel bandwidth of the DUs. The dynamic selection of split options among each CU-DU pair gives 90% centralization over the static functional split for a given midhaul bandwidth. © 2022 IEEE.