Forest had been the favourites to land Grealish on a loan until the end of the season, but the upheaval at the City Ground has meant that any potential deal has fallen through.
As a result, Wolverhampton Wanderers have reportedly become the leading candidates to sign the 19-year-old, with Villa keen to give him the opportunity to get regular first-team football.
Grealish has struggled to make an impact at Villa Park this campaign and a move looks appealing to all parties.
Impact for Forest?
The fact that Grealish will no longer sign is sure to be a disappointment, in what has been a disheartening time at the club.
Pearce's sacking has left many of the side's supporters feeling disillusioned and Grealish's move falling through is yet another frustrating bit of news.
The Villa prospect looked like the ideal addition for Forest, considering their struggles to create chances this campaign, but he now looks set to move elsewhere.