It is understood that Wolves are confident of tempting the 21-year-old to Molineux and are convinced he is eligible to play for them, despite featuring for Villa and Chelsea's under-23s this season.
Chelsea and Abraham may agree that a Premier League loan can aid his development further during the second half of the campaign, and Villa face the prospect of losing one of their star players earlier than they would have hoped for.
However, in the aftermath of Abraham's exit from the club, Smith should consider the signing of AFC Bournemouth's Jermain Defoe as reports from Sky Sports suggests the England global is free to leave the Cherries.
Chelsea set to cash in on Abraham?
Having made just four substitute appearances in the Premier League this season, the 36-year-old could fancy dropping down a division.
Premier League sides Huddersfield, Newcastle and Crystal Palace are thought to be interested alongside Wolves, after seeing his goalscoring ability for Villa this season.
To that end, they have launched an £18 million bid to sign the two-time capped England global.
If Abraham does leave Villa Park this month, Aston Villa need to prioritise a move for Jermain Defoe. However, the centre-forward is attracted to the possibility of a return to top-flight football, more so considering that Wolves are looking to push for a European berth.