The Villanova graduate was a nominee out of the North American committee, which also had former NBA star Reggie Miller, former NBA coach Don Nelson, former Virginia star Ralph Sampson, and former NBA and UCLA star Jamaal Wilkes selected.
Miller's older sister, Cheryl, is a previous inductee, making them the first brother and sister combination to enter the hall.
Former Georgia and Olympic star Katrina McClain was also among the inductees as was the All American Red Heads, the first women's team to be inducted.
Former 76er star Chet Walker earned induction out of the Veterans Committee, and, on Thursday night, former 76ers executive Pat Williams received the John E. Bunn award for lifetime achievement.
Nichols, who also was a longtime teacher at Villanova, officiated six NCAA title games, 10 Final Fours, three finals of the National Invitation Tournament, and 13 Atlantic Coast Conference championships.
Internationally, Nichols officiated at two Olympics and one European championship.
The 76-year-old was born in Niagara Falls, N.Y., and, following a high school career starring in three sports at Bishop Duffy, he earned a baseball scholarship to Villanova and later played in the Cincinnati Reds minor-league system before joining the Marine Corps.
Having later become involved in teaching and coaching basketball, Nichols said after his last team was 2-17 that he decided to become an official.
Following an officiating career that also included games in the Big East, Nichols became the national coordinator of officials for the NCAA, then a new position, for over two decades. As a rules editor, he is considered one of the most influential architects of the game.
He retired after the 2007-08 season but still works as an observer of major-league umpires.
In his induction speech, he cited his parents' giving him main principles to guide him and his late brother, Bob, through life: " 'Be fair to everybody. Treat everybody equally. Do the right thing.' "
He mentioned that he had talked to his father before taking the NCAA job that was intended to bring uniformity to officiating: "Getting the East, the North, the South, and the West, to get them all on the same page and straighten out that mess."
Nichols said his father said to take the job and "you'll have a job for life because they'll never straighten it out."
Walker opened his remarks saying, "This feels like a high school reunion. I've seen guys the last few days I haven't seen in 40 years. This is just a wonderful, wonderful experience we're having here this weekend."
Later he cited the 1966-67 world championship 76ers, who went 68-13, as a team that doesn't get its due. In a humorous touch, he turned to Billy Cunningham, one of his teammates on that squad who was an escort to the podium, and asked Cunningham to say a few things about him.
Of Cunningham, Walker said: "With all respect to John Havlicek, Billy Cunningham was the greatest sixth man to play in the NBA."
Cunningham said, "You knew what he was going to do. He was slow - you were slow, Chet - and you couldn't stop the man. He just took you to the spot on the court, faked you, went up over you, took it to the hole, or someone was open and he'd find the open man. And it truly was an honor to play behind him on the Philadelphia 76ers, and he's a special man."