The winger, who scored the first goal of the 2010 World Cup, trained at the City Ground last week and impressed manager Billy Davies.
The Kaizer Chiefs star's agent Jazzman Mahlakgane has revealed he rejected an approach from Lions boss Kenny Jackett.
"We had a request from Millwall to have a look at Siphiwe but we just couldn't do it. We have a verbal agreement with Forest so I couldn't just make him jump and down and go to anyone who wanted him," he told Football365.co.za.
"He was a star of the World Cup and we are not in a desperate situation to find a club, we just want to give Siphiwe an opportunity. Now we have to be patient and go through the proper processes with Forest."
Tshabalala returned to South Africa on Sunday night with a glowing report from Forest's coaching staff.
He spent five days under assessment with the Championship play-off chasers and will now return to help Chiefs attempt to win their first league title since 2005.
Mahlakgane will meet with Amakhosi officials this week to begin negotiations, although team manager Bobby Motaung has insisted that 'the price must be right' for the club to part ways with their key asset.
Mahlakgane added: "I think Forest were very, very impressed with him. Chiefs will be given their assessment first and shown their intentions before we can start trying to finalise things.
"It would be fantastic move for Siphiwe - Forest have a great history and he would love to be a part of that."
Tshabalala is only expected to return to England in June - first he wants to help Amakhosi break their title drought.