Varane has reportedly emerged as a top transfer target for Manchester United this summer.
The Frenchman is said to be keen on leaving Real Madrid, though manager Zinedine Zidane has claimed the 25-year-old World Cup-winner will not be going anywhere.
Nicol can see Varane moving to Serie A giants Juventus or Ligue 1 champions Paris Saint-Germain.
However, the pundit does not think he has the ability to play week in, week out in the Premier League for United.
Varane has been hampered with injury problems throughout his career and is yet to play 30 La Liga games in a season for Real.
“I do [see Varane leaving Real Madrid],” Nicol told ESPN FC.
“I don’t think he’s leaving for Manchester United.
“And the reason I don’t think that is because listen Varane may be 25, 26, but he’s had so many injuries.
“So this guy clearly has a physical problem with his body.
“So that being said, you don’t come to the Premier League.
“If he can’t play a full season, which he hasn’t done at Real Madrid since he’s been there, you’re not doing that in the Premier League.
“So Manchester United particularly certainly need a world-class defender, which he is.
“But they need somebody who’s going to play week in, week out and be the man at the back. That’s not your guy, Varane is not your guy.
“I don’t believe Varane’s going to Man United, I would suggest Varane wants to be going to maybe a Juventus, where he’s going to be in a team that’s totally dominant.
“But more importantly I think this guy goes to PSG, if they can afford it. He’s perfect for them.
“Physically, he could do this, he could play with a cigar in his mouth in Ligue 1 and then of course he would still have Champions League.
“Yes Varane I think is leaving, I do not think though it is too Manchester United.”