The 27-year-old Brazil international is expected to complete a move to Forest later this week after they agreed a fee of around £25million with Juventus.
It comes less than 14 months after Luiz joined the Italian giants from Villa in a deal worth around £42.5m.
The sale was critical to Villa complying with the Premier League’s profit and sustainability rules for the 2023-24 season and was completed just hours before the accounting deadline.
Luiz, a £15m signing from Manchester City in the summer following Villa’s promotion back to the Premier League in 2019, made more than 200 appearances in all competitions for the club and was a key part of the team which qualified the the Champions League in 2024.
But having been sold to Juventus, in a deal which ensured Villa avoided a PSR breach and probable points deduction, he endured an unhappy time in Serie A, making just three league starts last season.
Forest finished one place behind sixth-placed Villa in last season's Premier League and are again likely to be rivals in the race for European football.
The two clubs will also be strong contenders in this year's Europa League, with Forest having been promoted into the competition at Crystal Palace's expense after the latter were punished for breaching Uefa's multi-club ownership rules.