HITC Sport understands Forest striker set for loan move.
Walters joined Forest in September 2016 on a short-term deal after leaving Leeds that summer when his contract expired.
Walters came through the ranks at Elland Road, but never made a first-team appearance for the club during his time at Elland Road.
The 22-year-old has been a regular for Forest's Under-23s side since his arrival at the City Ground, but he has yet to make his first-team debut for the club.
Walters is highly-regarded within the corridors of power at Forest and he is tipped to establish himself in the first-team in the near future.
The forward remains well down the pecking order of Mark Warburton's plans right now and the Championship club feel he would be best served by going out on loan to get valuable first-team action under his belt.
A number of National League clubs have expressed an interest in taking Walters on loan, but Barrow have moved quickly to agree a deal with Forest.
Walters is set to go straight into the Barrow squad for this weekend's clash with Dagenham & Redbridge.
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