The 20-year-old enjoyed a sparkling first half of the season at the County Ground, playing 26 times while scoring twice and assisting four goals.
Smith was an early contender for the Adver Sport player of the season due to his performances in the early months of the 2020-21 season, but his displays began to dip slightly around early December.
The Arsenal man had started 22 League One games in a row until having to make do with a spot on the bench away at Charlton Athletic on January 23.
A substitute in both the 2-2 draw at the Valley as well as the 2-0 defeat at home to Plymouth three days later, Smith completely missed out on the match day 18 last Saturday when Town travelled to Hull City.
Rumours of a rift between Smith and the management were downplayed, but the Swindon management team confirmed the 20-year-old was under consideration for returning to the Emirates Stadium with manager John Sheridan stating it would be a “footballing decision” if it were to happen.
Smith’s departure also saw rumours of a move to Charlton Athletic as Arsenal attempt to find a new temporary home for the youngster before the 11pm deadline.