The Austria international has agreed an initial two-year contract, with the option of a third year, after leaving RB Leipzig upon the expiry of his contract earlier this month.
RB Leipzig had wanted to keep their vice-captain and made attempts to extend his deal, but the 28-year-old opted for a fresh challenge in the Premier League instead, turning down interest from several other elite European clubs in the process.
Schlager, who joined Leipzig from Wolfsburg in 2022, made 108 appearances for the Bundesliga side and has 55 caps for Austria. He started all four of his country's matches at this summer's World Cup, where they were eliminated in the round of 32 by Spain.
Nottingham Forest's midfield has been in need of reinforcement following the departure of Elliot Anderson to a Premier League rival, and the club had also been linked with Tottenham's Lucas Bergvall as an alternative option. Securing Schlager on a free transfer is regarded as a significant coup, with Leipzig having paid around €12m for him three years ago.
A medical is expected to take place in Nottingham this week before Schlager links up with his new team-mates at Forest's pre-season training camp in Portugal.
Known for his relentless work rate, ball-winning ability and composure in possession, Schlager offers Glasner a blend of defensive discipline and leadership in central midfield. He will provide competition for the likes of Ibrahim Sangare, Nicolas Dominguez and Ryan Yates as Forest look to build depth across the pitch for another Premier League campaign, having also secured European football.
Glasner, who took charge at the City Ground earlier this month, has previously worked with several Austrian players during his coaching career, and his relationship with Schlager is understood to have been a factor in persuading the midfielder to snub interest from elsewhere in Europe.
With the deal costing no transfer fee, Forest are able to direct resources towards wages instead, in what is regarded as shrewd business during a busy summer of recruitment.