The Pulitzer Prize-winning playwright will team up with his Caroline, or Change collaborator Jeanine Tesori for a new musical.
Nichols picked up eight Tony Awards for Best Director throughout his career.
The award is presented in recognition of a play inspired by American history.
The one-night reading at Joe's Pub will continue the fourth season of Public Forum.
Guests also included Parker Posey, Sandra Bernhard, and Jeff Goldblum, among many others.