Smith's longtime representative Derrick Fox told The Associated Press on Wednesday that Smith "is not going to play for the Panthers next year, I know that. I just don't know when that transaction is going to take place."
Fox said the Panthers have been trying to trade Smith, but expects he will ultimately be released.
He said the Panthers have not asked Smith to restructure his current contract which calls for him to make $7 million under this year's salary cap.
Regardless of whether the Panthers cut Smith or keep him, the club will have to pay him $3 million this season as part of the three-year contract extension he signed in 2012.
Smith's current contract runs through 2016.
Fox said Smith, a 13-year NFL veteran, would have preferred to finish his career with Carolina, the team that drafted him in the third round in 2001.
Fox said the 34-year-old Smith was "disappointed and surprised" when Panthers general manager Dave Gettleman talked about the receiver's future in uncertain terms at the NFL Scouting Combines last month.
"Where we are disappointed is the fact he signed an extension to stay loyal to the club and complete his career as a Panther," Fox said. "That is why we did the long-term team deal. Now we are at a crossroads where the Panthers don't want him anymore."
Gettleman did not return phone calls seeking comment.
Shortly after the Scouting Combine, Smith met with Gettleman at Panthers headquarters, but Fox said the receiver left without a clear, defined role in terms of his future with the team.
Fox said Smith diligently rehabbed an injured knee leading up to the team's divisional play game against the San Francisco 49ers with loyalty to the team in mind, thinking his long-term future was in Carolina.
Smith had four catches for 74 yards and a touchdown in Carolina's 23-10 loss.
"He spent 12 hours a day working with (trainer) Ryan Vermillion to get ready for that game," Fox said. "His goal has always been to stay a Panther."
Smith is Carolina's all-time leading receiver with 836 receptions for 12,197 yards and 67 touchdowns receiving. Smith is 19th all-time in NFL history in yards receiving and 25th in receptions.
Smith had 64 receptions for 746 yards and four touchdowns last season helping the Panthers go 12-4 in the regular season and capture the NFC South championship.
Fox said Smith plans to continue his playing career in the NFL when the Panthers cut ties.
"At 34, they could have kept him and run him in the slot," Fox said. "Steve wants to play in the slot. But he can't play the slot with the current roster, and he hasn't been able to play in the slot with the rosters in the past."
Fox said he's not sure why the Panthers haven't released Smith. He said he will be ready when that time arrives.
"It's my responsibility to find the best place for him to utilize his skills and passion for the game," Fox said.
If the Panthers release Smith he will count $5 million under this year's cap. The Panthers could designate him for a June 1 release which would allow them to split that money over the next two seasons.
NOTES: Panthers restricted free agent cornerback James Dockery announced on Twitter he has re-signed with the team. "Blessed! Can't be happier to be signing back with the Panthers can't wait to get back with our team," Dockery said. The team has yet to announce the move.
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