Pearce, who played for Forest for 12 years and initially turned down the job a week ago, said that it would not have been the right time to take over immediately, but being in charge for the start of next season suits him perfectly.
"I wouldn't call it a U-turn," he told a press conference. "We had discussions last week and I was very impressed with the owner. At the time I suggested that I had so much on of a personal nature, commercial aspects leading into the summer and the World Cup as well that it wasn't the right time.
"They have come back to me and asked if I was prepared to take the job in the summer and I jumped at the opportunity.
"It was a difficult decision last week, but everything feels right and I've got the opportunity to pre-plan for the summer. I hope [Gary Brazil] does [get the club promoted]. We want to play in the Premier League and if that happens this summer then all well and good."
Brazil will remain in charge for the remainder of the season.