The England international has moved down the pecking order at United as the club close in on signing Sweden centre-back Victor Lindelof for £30.7m from Benfica.
Smalling arrived at Manchester United from Fulham in 2010 as Sir Alex Ferguson’s side paid £10m for the promising youngster.
The 27 year-old year-old won United’s players’ player of the year in Louis van Gaal’s last season at the club but played just 18 times in the Premier League for Mourinho last term.
According to Metro Sport, the England man could be available for £15m this summer.
Arsene Wenger is not the only reportedly interested manager as West Ham’s Slaven Bilic and Ronald Koeman at Everton are also keen on Smalling.
Mourinho would prefer for Smalling not to move to The Emirates, but the defender appears to know that he is on his way out and signed with a new agent this week in anticipation for his exit.