I strongly recommend a divine weapon for this fight. Nito himself is a necromancer, so divine weapons will ensure that the skeletons don't get back up.
When you drop down into the arena, drink Estus immediately to heal. Stay put and wait for the initial batch of skeletons to rush you. Kill them with the divine weapon and wait for Nito to come over to you (so you don't aggro the other skeletons). Nito is large and has a blind spot to his left. Attack when given the oppurtunity and be sure to either roll away or block his AoE. When you see him huddle over and hunch, he is about to do the AoE. If you are planning on rolling away, 3-4 rolls will get you away. Of you plan on blocking them, use a shield with high magic resist.
NOTE: If you kill Nito, then the Paladin Leeroy invasion will not occur and you won't be able to join the Gravelord Servants covenant for the rest of your playthrough.