Scarpa's contract expires at the end of this month and he will sign a three-and-a-half year deal with Steve Cooper's side at the start of January.
The 28-year-old will become Forest's 24th signing this season and will be expected to provide some creativity from the middle of the park for a side sitting 18th on the Premier League table.
Scarpa made 211 appearances for Palmeiras, scored 37 goals and provided 51 assists, helping them win two Copa Libertadores title and one Brazilian league crown.
The once-capped Brazil international told the official club website: “I’m very happy to be here, it’s a dream for me.
“It’s a new challenge and I can’t wait for it to begin. It’s always been an ambition since I was a little kid to play in Europe and my dream is to play in the Premier League.
“I’m a technical player but also I’ve developed my game defensively over the past couple of seasons. I’m very dedicated, hard-working and I’m excited to get started now.”
