The versatile full-back had been a part of the Bristol City squad that is challenging for promotion from League One under Cotterill and had spoken last week of his excitement at potentially playing at Wembley in the Johnstone's Paint Trophy.
He was not included, however, in the Robins squad which played Gillingham in the area final on Tuesday night with parent club Chelsea thought to be keen to see him perform in the Championship.
"Todd has been recalled by Chelsea and it has left a bit of a bad taste," Cotterill has been quoted as saying.
"I would have liked the opportunity to keep him for a bit longer, but he is Chelsea's player and they can do whatever they want with him."
For Forest of course it is an opportunity to strengthen their squad despite the transfer embargo that was placed on them recently and Kane will hopefully play his part in a Reds' revival over the next few weeks and months.
It does, though, raise the question again of the power that the top Premier League clubs hold with their ability to maintain large squads and loan out a lot of players at one time.
Update - The deal has been confirmed with the funds coming from the recent Sky Bet competition that was won by a Nottingham Forest supporter while weekend opponents Sheffield Wednesday have also signed a Chelsea youngster on loan in the shape of midfielder Lewis Baker.