Sharp joined Saints from Doncaster in the January transfer window and scored nine goals in 15 matches to help Nigel Adkins' side secure promotion to the Premier League.
The 26-year-old also found the net in the Capital One Cup win over Stevenage in midweek.
But following the arrival of Zambia international Emmanuel Mayuka at St Mary's and the return to fitness of Tadanari Lee, Adkins has decided to allow Sharp to join Forest.
Saints boss Nigel Adkins completely dismissed the prospect of landing the VVV-Venlo player after Saturday's Premier League defeat to Wigan.
But it is understood Southampton were poised to complete the deal inside the next 24 hours.
The Championship runners-up are also eyeing three more signings before he transfer window closes on Friday night, on top of putting the finishing touches to a move for Bologna star Gaston Ramirez.
Prospective new team-mate Kelvin Davis has claimed the Ramirez raid proves the south-coast club mean business this season.
Saints returned to the Premier League this summer after a seven-year absence, but their campaign has yet to gather any momentum following back-to-back defeat.
Adkins has so far added Steve Davis, Nathaniel Clyne, Paulo Gazzaniga, Jay Rodriguez and Emmanuel Mayuka to his squad, but he hopes to do more business in the next 48 hours.
Top of his wish list is Bologna forward Ramirez. The Ur uguay international has been in talks with Saints for some time and despite negotiations faltering at one point last week, an 11million deal is now understood to be close to completion.
Baggies boss Steve Clarke was assistant manager to Kenny Dalgish as the Reds lifted the cup in Wembley in February with victory over Cardiff.
The Red Devils also face top-flight opposition in their bid for silverware, with Alan Pardew's Magpies set to visit Old Trafford - the first game out of the hat in Thursday night's draw.
Manchester City host Aston Villa while Coventry are faced with a daunting trip to the Emirates Stadium to take on 2011 runners-up Arsenal.
European champions Chelsea host recently-relegated opposition in the form of Wolves, who were the last side to book their place in the third round with victory over Northampton tonight.
Andre Villas-Boas' Tottenham make the long trip to Brunton Park and Carlisle, while Everton cross the Pennines to take on Leeds.
QPR and Reading face off at Loftus Road and West Ham welcome Wigan in the two remaining all Premier League encounters.
Martin O'Neill's Sunderland head to MK Dons with Southampton hosting their former manager Dave Jones as he returns to St Mary's with new club Sheffield Wednesday.
Norwich are at home to Doncaster while Swansea travel to Crawley, and Swindon's reward for ousting Stoke is a home tie against Burnley.
Middlesbrough venture to Deepdale to face Preston with Bradford taking on Burton in the only match involving two League Two clubs.
Capital One Cup third round draw:
Man Utd v Newcastle, Man City v Aston Villa, MK Dons v Sunderland, West Brom v Liverpool, Crawley v Swansea, QPR v Reading, Norwich v Doncaster, Bradford v Burton, Preston v Middlesbrough, Arsenal v Coventry, Southampton v Sheff Wed, Chelsea v Wolves, Carlisle v Tottenham, Swindon v Burnley, West Ham v Wigan, Leeds v Everton.
Ties to be played week commencing September 24
Despite boss Nigel Adkins recently denying a move for the 24-year-old becomes the club's sixth summer signing.
Yoshida, who captained his country at the London Olympics this summer, has played over 50 games during two years with Venlo and netted five goals.
Saints have already bolstered their squad with the arrival of Steven Davis, Nathaniel Clyne, Jay Rodriguez, Emmanuel Mayuka and Paulo Gazzanigato.
It was revealed on Tuesday that Bolton are one of five clubs keen on signing Spearing, who is considering his future at Liverpool following the recent captures of Joe Allen and Nuri Sahin.
A loan move or 3million permanent exit for Spearing has been mooted, with Premier League trio Aston Villa, Queens Park Rangers and Southampton also thought to be considering a bid for the 23-year-old.
Coyle remains hopeful of bringing the midfielder to the Reebok Stadium and is waiting to see if the Trotters will win the race before Friday's transfer deadline.
"It's more complicated than people think," said Coyle after Bolton's Capital One Cup defeat at Crawley. "It isn't just a case of going out and bringing him in.
"Jay Spearing is a very good player and there's a lot of competition for that lad's signature.
"All we can do is our very best, and we'll continue to do that.
"I can't say right now that he's going to sign tomorrow morning becau se there is huge interest in him from clubs much bigger than ourselves. We'll see what transpires."
The south coast side began their first top-flight campaign in seven years with a trip to champions Manchester City and, following Saturday's defeat to Wigan, welcome United to St Mary's before facing the Gunners..
Before that, though, Saints have a slightly less glamorous Capital One Cup second round tie at Stevenage to contend with.
Nigel Adkins has pledged to make changes to his side but Hooiveld, like his manager, will take their third tier opponents seriously, especially as Saints were in the same division not so long ago.
"That is somewhere we were two years ago so that is nothing to make jokes about," the Dutchman said.
"That is English football, you know? They can go and play and we have to do well. We need to pick it up again.
"It doesn't matter who it is. It's 0-0 when you start."
It is yet to be seen whether Hooiveld will be risked for the match at Broadhall Way given Saints' lack of central defensive options heading into their set of tough league games.
Adkins plans to make a number of changes for the match, with a number of academy graduates and squad players expected to start.
Tadanari Lee is one of those as the Japan international continues his rehabilitation after suffering a foot injury at the end of last season.
"It will be similar to what we did last year," Adkins said of his Capital One Cup plans.
"Obviously the objective is to get the youth players through the system as well as players that have been in the squad that have not had the games.
"We have Tadanari Lee and he has been out after an operation on his foot at the end of last season.
"He played 70 minutes in a development game and has the perfect opportunity now in his rehabilitation.
"He is getting closer to full fitness and could actually start the game against Stevenage so that is what we will be looking to do for Chung (Lee)."
Do Prado was detained after his Porsche was allegedly seen to be driving "erratically" in the Hampshire city centre at 4.35am on Monday.
The 30-year-old, whose full name is Guilherme Do Prado Raymundo, was subsequently charged with drink-driving.
A Hampshire police spokesman said: "The arrest followed after police officers noticed a vehicle being driven erratically in the High Street, Southampton, at approximately 4.35am, Monday August 27."
The Brazilian-born player has been bailed to appear at Southampton Magistrates' Court on September 12.
