The former England Under-21s coach tactfully turned down the job following initial talks last week, citing family reasons.
But he appears to have now made a U-turn and confirmed that he is in talks about taking over at the City Ground, although he will not take charge before the summer.
"I'm still talking with Nottingham Forest and I'm due to go up and meet them tomorrow," he told talkSPORT.
When pressed on whether he will be the manager next season, Pearce added: "It's very likely."
The 51-year-old spent 12 years with Forest as a player and admitted earlier on Wednesday that he still had a lot of affection for the club.
"Forest have always been well supported whatever league they've been in, there's a rich history there," he said.
"It's a great club and one that's very close to my heart."
Previous boss Billy Davies was sacked by Forest owner and chairman Fawaz Al Hasawi last week with Gary Brazil taking temporary charge.
Pearce, who spent two years as Manchester City boss before becoming England Under-21s coach in 2007, was first approached by Forest following Neil Warnock's decision to turn the job down.
Forest currently lie seventh in the Sky Bet Championship, two points adrift of a play-off place with seven games remaining.