The Nigeria international has been expected to depart the King Power Stadium following the Foxes' relegation to the Championship and was believed to be on the verge of moving to the City Ground.
However, according to Football Insider, Bayern could throw a late spanner into the works, as Thomas Tuchel's side have also shortlisted Ndidi as a potential midfield target.
The Bavarians are thought to be searching far and wide for a defensive midfielder before Friday's transfer deadline, and Ndidi would be a cheaper alternative to Fulham's Joao Palhinha.
The report states that Forest may not be able to compete with Bayern's financial muscle, although Leicester only have Ndidi under contract until 2024 and therefore cannot demand an extortionate fee.
The 26-year-old boasts 12 goals and 12 assists in 242 matches for Leicester since joining from Genk in 2017, and he has already played five times for Enzo Maresca's side this season.
Over at Goodison Park, Everton are allegedly in talks to sign Borussia Monchengladbach defender Nico Elvedi.
The 26-year-old is also due to become a free agent at the end of the 2023-24 campaign, although his contract does include an extension option based on performances.
Elvedi started 32 Bundesliga matches for Monchengladbach last season, but he has not played a single minute for the German club this summer in anticipation of a move away.
Monchengladbach's sporting director Roland Virkus revealed earlier this summer that Elvedi wanted to seek out a new challenge elsewhere, and according to Gianluca Di Marzio, Goodison Park could be his next destination.
The journalist reports that negotiations are ongoing between the Toffees and Switzerland international, who is also believed to be on the radar of Wolverhampton Wanderers.
Elvedi left FC Zurich in 2015 to join Monchengladbach and has since scored 14 goals and set up nine more in 270 matches, while he boasts 47 caps for the Switzerland national team.
Meanwhile, Lazio are reportedly on the brink of signing Marseille midfielder Matteo Guendouzi on loan with an obligation to buy.
The 24-year-old established himself as a key player for Les Olympiens after ending his turbulent stint at Arsenal, but he has slipped down the pecking order under new boss Marcelino.
Guendouzi is yet to start a Ligue 1 game this season - playing just 17 minutes off the bench across the first three gameweeks of the season - and he has been tipped to head for the exit door for some time.
According to Fabrizio Romano, Lazio have now agreed a deal to sign the France international, and they will pay an initial loan fee of €1m (£856,922) before signing him permanently for €12m (£10.3m) in 2024.
Marseille could also pocket a further €5m (£4.3m) through performance-related add-ons, and Guendouzi is expected to arrive in Italy on Tuesday to complete his switch to Serie A.
The 24-year-old will leave Marseille with a record of 10 goals and 19 assists from 103 matches, prior to which he became an FA Cup winner with Arsenal, despite being exiled from Mikel Arteta's squad.
Finally, Wolverhampton Wanderers outcast Bendeguz Bolla is understood to be closing in on a move to Swiss giants Servette.
The Hungarian defender was a £1.7m acquisition from Fehervar in 2021, but he has not made a single competitive appearance for the West Midlands club over the past couple of years.
Bolla has spent the past two seasons on loan with Grasshoppers and made a name for himself in the Swiss league, scoring six goals and providing seven assists in 66 matches.
Despite a series of impressive displays, Bolla will seemingly not be given the chance to make his mark at Molineux, as Romano - via BirminghamLive - reports that he will soon return to Switzerland with Servette.
The 23-year-old is poised to join on an initial loan deal with an option to buy in 2024, meaning that he could depart Wolves without making his first-team debut for the Premier League outfit.
Bolla - who played as a right-back, left-back and right wing-back for Grasshoppers - remains under contract with Wolves until the end of the 2025-26 campaign.