The 26 year old striker will spend the rest of the season on loan at The City Ground in a move that sees him reunited with Sean O’Driscoll who was his manager at Doncaster.
Chairman Omar Al Hasawi said: "No manager knows Billy as well as Sean does and when he made it clear he wanted to bring him to the Club we did everything in our power to make it happen.
"BIlly's goal-scoring record is outstanding and we have no doubts he will fit in perfectly at The City Ground and add to the attacking threat we already have."
Sharp, who is eligible to make his debut against Charlton tomorrow (kick-off 3pm), launched his career with his hometown club Sheffield United but it gathered pace at Scunthorpe, where he scored 53 goals in 82 league appearances.
United re-signed him in a reported £2million deal in 2007 but two years later O’Driscoll swooped to take him to Doncaster on a season-long loan.
Sharp made an instant impact, bagging 15 goals in 33 league appearances in his first season with his new club and in the summer of 2010 completed a permanent switch to Doncaster for a club record £1.15million.
He scored 25 goals in 49 league outings before joining Southampton in January of this year.
He scored nine league goals in 15 games for The Saints as they clinched promotion to the Premier League.
Tickets for tomorrow’s game are available in person from the Forest Ticket Office; on-line at www.nffcretail.com or by calling 0871 226 1980 (calls charged at 10p per minute, mobile rates may vary).