Carayol's deal at Forest was due to expire this summer, but both parties have decided to cancel the contract early to allow the winger to find a new club.
New Forest boss Aitor Karanka has decided to let Carayol leave as he does not figure in his plans going forward at the City Ground.
Carayol has not featured since Karanka's arrival at the City Ground and, with several new signings expected to arrive at Forest before the close of the transfer window, they are ready to let Carayol move on.
A number of clubs have shown an interest in Carayol during this month's transfer window, but Ipswich have moved quickly to try to secure Carayol's services following his departure from Forest.
The player is understood to be on his way to Suffolk for talks and a medical ahead of finalising the move before the transfer deadline.