The 29-year-old became a free agent after Manchester United failed to offer the midfielder a new deal.
Lingard, who enjoyed a loan spell at West Ham during the 2020/21 campaign, was expected to re-join the Irons, but the move faced complications due to the size of his desired salary.
Instead, newly promoted Nottingham Forest jumped into the picture and matched Lingard's desired salary to seal his signature.
The England international will join former United teammate Dean Henderson at the club, who arrived earlier in the window on a one-year loan.
Forest manager Steve Copper has been busy strengthening his side for the forthcoming campaign, and has already sealed the signatures of Omar Richards, Neco Williams, Wayne Hennessey and most recently, Huddersfield Town duo Harry Toffolo and Lewis O'Brien.
Lingard spent 20 years at Manchester United, taking into account his 11-year stint in the academy set-up.
The player made 232 appearances for the Red Devils and scored 35 goals across all competitions.
Lingard is also a former FA Cup, League Cup, Community Shield and Europa League winner, and brings with him a wealth of experience.
The first home game for the players will be a noteworthy one considering the former European Cup winners will take on West Ham.
Forest enjoyed an incredible campaign last year, as they lost six of their first seven games before powering up the standings under Cooper's stewardship.
A successful run in the Championship play-offs culminated with a 1-0 victory over Huddersfield Town at Wembley which ensured promotion to the Premier League.
Forest have been out of the top tier for 23 years, with their last campaign in the division taking place in 1998/99.