Ian Rapoport and Kim Jones of NFL Network reported the move will happen in "the coming days." It's unclear if Smith will be released or traded, though the former is far more likely.
Smith is due an $18.8 million base salary in 2021. Washington would save $14.7 million off its 2021 cap by moving on from his contract.
Smith returned in 2020 from a life-threatening leg injury, throwing for 1,582 yards and six touchdowns against eight interceptions in eight games on his way to winning NFL Comeback Player of the Year. While he was noticeably a lesser player than his prime, Smith helped lead Washington to an NFC East championship and went 5-1 as a starter.
Smith recently spoke to Clay Skipper of GQ and said it was clear to him that the team did not want him back heading into last season.
"When I decided to come back, I definitely threw a wrench in the team's plan," Smith said. "They didn't see it, didn't want me there, didn't want me to be a part of it, didn't want me to be on the team, the roster, didn't want to give me a chance. Mind you, it was a whole new regime, they came in, I'm like the leftovers and I'm hurt and I'm this liability. Heck no, they didn't want me there."
Washington has explored options to improve the quarterback spot but has yet to make any moves. The team re-signed Taylor Heinicke, who impressed in place of Smith in Washington's Wild Card Game loss to Tampa Bay, but there is no obvious starter on the roster.
Smith has been open about his desire to return for the 2021 season, but his market will likely be limited. Some teams will undoubtedly have hesitation about the long-term health of his leg, and his passer rating last season (78.5) ranked 31st among qualifying quarterbacks.
If Smith is willing to take on a backup role, then perhaps he'll find a home. If he thinks he'll get to compete for a starting job, that feels unlikely at this juncture.