The Sun says City could pocket up to £500,000 by selling Wales international Smith to MK Dons.
The 22-year-old midfielder has cut short a loan move at Hull and is ready to join the League One club on a permanent basis.
City will receive a nominal fee initially for Smith – who has yet to make a first team appearance for them – but that will increase if he proves a success in Buckinghamshire.
The champions have also agreed a sizeable sell-on clause should the youngster move for big money in the future.
Need a VPN? Or seeking to switch? Then support Tribal Football by clicking here to sign up with our official partners NordVPN. Not only will you receive the best VPN experience, but also great discounts by signing up via Tribal Football. Thanks for your support!