Gray is leaving "to pursue a new playing opportunity abroad", with Japan thought to be the 35 year old's likely destination.
Glasgow's upcoming fixtures in South Africa - against the Sharks and Stormers on October 19 and 26 - look like being Gray's final games for the club.
Gray could be asked to play against Scarlets at Scotstoun on 29th November but Smith has indicated that he won't be making that demand on the player. "Technically, he;s still here until the 1st of December, but it would be unwise of me to persist until the very last day," said Smith.
RugbyPass carried a report last week claiming Warriors were keen to bring Scarlets and Scotland forward Alex Craig.
Smith has said he's in the market for a new lock forward but was giving little away about the speculation regarding Craig, preferring to talk about the impressive progress of Alex Samuel, Max Williamson, Gregor Brown and Euan Ferrie.
"For now, I'm not going to say much about it," said Smith in The Scotsman. "Let's see how it plays out.
"We're going to replace Richie. It's just such an important role. I think Alex and Max are coming along well. Gregor did a sterling job on Friday night [against Zebre]. He brings a different aspect to our game. He carries like a loose forward.
"His defence is good, he moves well, and his set-piece is excellent. I call them shocks and flocks, so short locks and flank locks. With these boys, their mentality is about applying themselves best, no matter what role or jersey they've got. Richie has been important, but to get somebody else to replace him will be also part of it."
Smith also revealed JP du Preez, who did not play at all last season due to a knee injury, is expected to return in the new year.
"That's going to come at the right time," Smith said.
"Everything in life happens for a reason, and hopefully he comes through for us when we're going to need him most."