AAP understands City received a fee close to $200,000 to release McKenna to the Women's Super League 2 club.
McKenna joins golden boot winner Holly McNamara (Everton), midfielders Leah Davidson (Charlton) and Laura Hughes (Southampton), defender Alexia Apostolakis (Bristol City) and Bryleeh Henry (Rosengard) in leaving champions City.
Those players, except Wales international Hughes, will all be attempting to push their Matildas case ahead of next year's World Cup.
McKenna, 24, had enjoyed two seasons as one of the league's best players, earning a maiden Matildas call-up this year and scoring on debut against Malawi in April.
"Leticia arrived at Melbourne City as a young player who we believed could develop into an integral part of our team," City football boss Michael Petrillo said.
"To see her leave as a Matilda, a championship winner, second on our all-time women's appearances list and now as part of a record-breaking transfer for the league is something we're extremely proud of.
"That journey is a credit to Leticia's talent, work ethic and the way she has embraced every opportunity in front of her.
"Her move to Nottingham Forest is thoroughly deserved."
McKenna, initially recruited by the late Rado Vidosic after stints at Perth and Brisbane, made 114 appearances and scored 16 goals for City across five seasons, including a long-range stunner in this year's grand final win over Wellington.
"These last five years at Melbourne City have been so special, and this club will always feel like home to me," McKenna said.
"I've been lucky to share so many incredible moments with amazing teammates, coaches, staff and supporters, and I'm really proud of everything we were able to achieve together."
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