"The club have agreed to this request and the terms of departure have been agreed. Both parties wish each other every success for the future."
The club owners reportedly have not been fully satisfied with Karanka's performance despite the good results and the fans' support.
Under Karanka, who had led Middlesbrough to the Premier League, Forest holds the seventh spot in the second tier table, four points adrift of the playoff spots.
Although Forest lost to Chelsea 2-0 in the FA Cup third round, they had prevailed 4-2 over Leeds United in their most recent Championship game.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)