Explicitly assigning a null value to variables that are no longer needed helps the garbage collector to identify the parts of memory that can be safely reclaimed. Although Java provides memory management, it does not prevent memory leaks or using excessive amounts of memory.
An application can induce memory leaks by not releasing object references. Doing so prevents the Java garbage collector from reclaiming those objects, and results in increasing amounts of memory being used. Explicitly nullifying references to variables after their use allows the garbage collector to reclaim memory.
One way to detect memory leaks is to employ profiling tools and take memory snapshots after each transaction. A leak-free application in steady state will show a steady active heap memory after garbage collections.