The Portuguese, 57, has signed a contract to 2027, replacing Sean Dyche, who was dismissed by Forest last week.
The Reds currently sit in 17th place on the Premier League table, three points away from the dropzone.
He will be joined by coaching staff Filipe Jorge Monteiro Almeida (Assistant Coach), Luis Miguel Moreira Da Silva (Assistant Coach), Bruno Filipe Araujo De Moura (Head of Physical Performance and Opposition Analysis), and Pedro Simao Capela Silva Lopes (Opposition Analyst).
Pereira took charge of Wolves last season, with the club in the relegation zone. Pereira led them to a six-game winning run which helped guide them to safety during the 2024/25 season.
It was the longest winning run of any team in the top-flight last season, in a campaign which also saw Wolves score a club record number of goals in the Premier League.
However, he was eventually dismissed earlier this season as Wolves failed to recover from a poor start to the campaign.