Despite a recurrence of his knee problem, Nicholls played in 23 league games during the 2009–10 season. It was later revealed by Luton director Gary Sweet that Nicholls had deliberately downplayed the seriousness of this injury to lead the team, "playing through excruciating pain and ultimately risking his long term health". Surgery on this knee in early March 2010 ruled Nicholls out for up to eight months. Ultimately, this injury proved to be the end of his playing career. On 27 August 2010, he left the club by "respectful, mutual consent" after volunteering to be released from his contract, citing that he did not want to take money out of the club while not contributing on the pitch owing to his injury. In a club statement, managing director Gary Sweet branded Nicholls a Luton Town "legend" and "arguably the club's most successful captain".