After weeks of speculation over the future of Billy Davies it is understood that the Scot has been sacked with one year left on his Reds contract.
Despite talk that Malky Mackay and Chris Hughton were names in the frame to replace Davies should he leave, the Forest hierarchy have opened talks with former England manager McClaren.
Having made his name as assistant manager at Manchester United, McClaren guided Middlesbrough to silverware and a European final before his ill-fated spell in charge of the national team.
He has since rebuilt his reputation abroad, winning a Dutch title with FC Twente before a spell with Wolfsburg in Germany's Bundesliga.
BBC Sports Reporter Pat Murphy, always close to the news coming out of the City Ground, believes McClaren has turned down more lucrative offers on the continent to return to English football.
He told 5 Live: "Davies was looking forward to another year to make it happen.
"He always felt he had not had enough support from the chairman for what he called 'stellar signings'. But they [the board] felt they had provided enough backing."