Camara, 37, played a record 423 times for the outfit where he won the Ligue 1 title in 2012 and made the last of his 35 international appearances in the same year.
"We spoke on Friday and the decision was taken," Nicollin told Midi Libre newspaper.
"He's now thinking about what he'll do next. We've given him some time to know what he wants to do, if he wants to coach here. We've left the door open," he added.
Camara started his career with Monaco in 2001 before a loan spell at Guingamp and joining Nice four years later.
He was part of the Senegal squad which beat the then holders France en route to the 2002 World Cup quarter-finals.