The Reds have been working hard to identifying targets they feel will aid their quest to push for promotion to the Premier League in 2013/14.
A lack of creativity in wide areas has been an issue at the City Ground for some time, and that is an area Billy Davies intends to address.
Paterson is considered to tick all of the boxes Forest are after.
He is only 21 years of age, so still has plenty more to offer, but proved in 2012/13 that he is capable of terrorising Football League defences.
He plundered 13 goals in all competitions last season and was an ever-present for Walsall as they narrowly missed out on a play-off spot in League One.
Forest are hoping they can be the ones to benefit from Paterson's undoubted potential and will now open discussions regarding personal terms with the highly-rated winger.