Diamantakos has scored six goals in 19 appearances in Germany's second tier and has been capped twice by the Greek national team.
The 23-year-old, who is 6ft 1in tall, operates primarily as a centre-forward but can play on either flank if required.
Leeds could be in the market for a new front man this summer with Mirco Antenucci unlikely to have his contract renewed, while Wednesday's interest in German-based attackers is nothing new.
The Owls saw an offer for former Karlsruhe striker Rouwen Hennings turned down last summer, according to reports, before the 28-year-old signed for Burnley.
And last month they were linked with Bochum's Simon Terodde, alongside Derby County.
However, it could be Forest who stand the best chance, with reports continuing to link Olympiakos owner Evangelos Marinakis with a takeover at the City Ground.
Diamantakos was on the Greek champions' books until February, when his loan to Karlsruhe was made permanent at a reported cost of £1 million.