The left-back joined Everton from Marseille in the summer of 2020, but he has made just seven senior appearances for the club.
Nkounkou had a loan spell at Belgian side Standard Liege before he was sent out on loan again to Cardiff City last summer.
The defender has been a key part of the Cardiff squad this season and has made 18 appearances in the Championship.
It has been claimed that Everton and Cardiff recently held talks over the future of the defender, with discussions taking place on Thursday.
And the two clubs have decided to let Nkounkou continue at the Championship side for the rest of the season.
Everton have the option to recall him but the Toffees have decided to keep him at Cardiff until the end of the ongoing campaign.
Unless something drastic happens, the defender will stay at Cardiff and complete his loan stint until the summer.
He will have a year left on his contract at Everton when he returns to Merseyside in the summer.
