The 37-year-old is already in Porto and is expected to complete his move once he passes a medical, according to A Bola.
Smalling has been without a club since leaving Saudi Arabian side Al-Fayha, where he spent the past two seasons.
The move will give Porto another experienced option in central defence as they continue their campaign across domestic and European competition.
Smalling is expected to sign a contract running until the end of the season.
The veteran defender has spent the majority of his career at the highest level of European football, beginning with Fulham before moving to Manchester United in 2010.
He spent more than a decade associated with the Old Trafford club, making 323 appearances and winning two Premier League titles, as well as the FA Cup, League Cup and Europa League.
Smalling subsequently moved to Italy, where he became an important part of Roma’s defence. He made more than 150 appearances for the Serie A club before moving to Al-Fayha in 2024.
His international career also included 31 appearances for England and one goal.
Porto’s decision to bring him back to European football continues a recent trend of the club supplementing its squad with experienced defenders.
Smalling follows Thiago Silva, who joined the Portuguese side on a short-term basis last season, although the circumstances of the two moves are different.
For Smalling, the Porto agreement offers an immediate return to a competitive European environment after his spell in Saudi Arabia.
The defender’s experience across England, Italy and international football is also likely to be an important factor for a Porto squad that can benefit from an established presence at the back.
A Bola reports that the final step before the deal is completed is Smalling’s medical.
If that is successfully completed, the former Manchester United and Roma defender will sign through the end of the 2026-27 season.
Smalling therefore has the opportunity to extend his career in European football at one of Portugal’s biggest clubs, having spent the past two years outside the continent’s major leagues.