Pereira becomes Forest's fourth coach of the season and replaces Sean Dyche, who was sacked early on Thursday after 114 days in charge.
Pereira was appointed by Wolves in December 2024 and kept the club in the Premier League last season, but was sacked in November after a dreadful start.
He joins a Forest side lingering three points above the relegation zone with 12 games remaining, following a 0-0 draw at home to bottom side Wolves last time out.
Pereira has worked under Forest owner Evangelos Marinakis previously during a five-month spell at Greek side Olympiacos in 2015.
The dismissed Dyche won six of his 18 league games after succeeding former Tottenham boss Ange Postecoglou, who went winless in just eight matches and 39 days in charge.
Postecoglou had replaced Nuno Espirito Santo, with the Portuguese axed after three league games due to a strained relationship with Marinakis over Forest's transfer activity.
Forest – already out of the FA Cup – have a break between games and visit Fenerbahce next Thursday for the first leg of their Europa League knockout play-off.
They then return to the City Ground to host a Premier League clash against sixth-placed Liverpool.