Freedman revealed the news on Wednesday night following his side's 3-1 defeat to Watford at the City Ground.
The final details of the new deal are still to be confirmed, but the Scot has put pen to paper and believes Fawaz Al Hasawi, the club's owner and chairman, is set to do likewise in the very near future.
"I have signed the contract which he sent me and I have sent it back. It's done," said Freedman
"The chairman is here, so hopefully he will sign his part. I have signed my part, so it is all but done."
"I don't see any hiccups. I'm delighted to be the manager of this club
"I am so excited. It's a fantastic opportunity."
Freedman replaced Stuart Pearce as manager at the beginning of February, agreeing an 18-month contract, but the situation was to be reviewed at the end of the season
Forest were unbeaten during his first six matches in charge, winning five of them, as they started to make up ground on the teams in the Championship play-off positions.
However, the Reds are now without a win in five games, losing four, with a ninth-place finish the highest they can achieve this campaign.
Despite recent results, Al Hasawi has seen enough to believe Freedman is the right man for the job and the 40-year-old former Crystal Palace and Bolton boss is relishing the challenge of rebuilding Forest to become a Championship force again.
Freedman said: " I am here for two more years and there is an option in there to extend it again, if the club want to.
"You cannot look too far but it is nice for the players to know who they will be working with for the next couple of years.
"We have to build something now and I am excited about that. I have a good squad and a good spirit here."
"We have Chris Cohen and Andy Reid coming back from injury, we have young Britt [Assombalonga] coming back too hopefully, before too long, with the goals he brings
"There are a couple of young players coming through and I will recruit a couple of players.
"I have to build something - it doesn't just happen overnight. We have tried that trick and tried to throw money at it and it has got us nowhere.
"Let's settle everything down a little bit.
"It is certainly a brighter future but we need to plan it in a different way.
"It might not be back-page stuff but we will slowly go about our business and try to be successful for the longer term."
Source : PA
Source: PA