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The ¿ì²¥ÊÓƵ acquired this park property in 1964. The ¿ì²¥ÊÓƵ acquired more than six acres of land in the deteriorating Hyde Park neighborhood from the City's Department of Urban Renewal. The Park District soon improved the site with a reflecting pool, tennis courts, walkways, and asphalt-surfaced play areas for tots and older children. In 1970, Italian-American artist Cosmo Campoli created a fanciful bronze sculpture called "Bird of Peace" which enlivens the park's central lawn. Though the Park District expanded the park a bit during the following decade, several acres of cleared land immediately to the south remained undeveloped for years. In the mid-1980s, the Hyde Park Development Corporation recommended that the vacant property be used for stores and upscale townhouses. Many neighborhood residents instead favored expanding Nichols Park. After lobbying for the project for several years, the community convinced the City Council to approve the expansion. The Park District expanded the park in the 1990s bringing Nichols Park to more than ten acres, and the new park land soon had a formal garden, a fountain, and a grassy courtyard. In 2004, the Park District did an even land exchange with Chicago Public Schools.

The park honors artist and urban planner John Fountain Nichols (1912-1980), a life-long resident of Hyde Park. A student of the Art Institute of Chicago, Nichols participated in the Federal Artists' Project during the Great Depression. (One of his many murals can be found at the north side Lane Technical High School.) After returning to his studies and earning a BFA during World War II, he taught art in south side public schools, later becoming an architectural draftsman. During the 1950s and 1960s, Nichols worked for the Department of Urban Renewal, developing plans to rehabilitate his Hyde Park neighborhood. After his retirement in the 1970s, Nichols continued to participate in arts-related events at Murray School, which sits adjacent to the park.