Smalling was pushed out of the regular starting line-up at Manchester United this past season, and his opportunities are likely to be further limited after the arrival of Victor Lindelof at Old Trafford.
Chairman Daniel Levy wants the centre-back gone before he commits to reinvesting in the backline, having already missed out on Hull City's Harry Maguire who was snapped up by Leicester City for £17 million.
Mourinho is also ready to offer Dier the chance to establish himself as a holding midfielder at Old Trafford so the lure of playing in his preferred position will be a tempting prospect for him.
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On Monday, the European Commission insisted it was "fully prepared and ready for the negotiations to start" the process.
Smalling has become an important member of the England squad and has 31 worldwide caps under his belt.
Pochettino is keen to bolster his defensive options for next season and that will be particularly needed if he persists with a back three. But he knows he will have to make additions to his squad if he is to do so.
Kevin Wimmer is expected to leave the club this summer in search of first-team football elsewhere, and whilst Eric Dier has dropped in to play at centre back in 2017, manager Pochettino may want another defender to boost his ranks alongside Toby Alderweireld and Jan Vertonghen.
Speaking about United's Europa League final win over Ajax, Mourinho told Tribuna Expresso in his native Portugal that there was no way United would play out from the back in that game, joking about Smalling's poor ability with the ball at his feet.