Variety claims that Tarantino wrote the lead role of Django with Smith in mind, and that the I Am Legend star has already been informally offered the part.
Earlier this month pages from the upcoming Western's script were leaked online, revealing that the film will follow an escaped slave called Django, who teams up with a German bounty hunter to lead a revenge mission on his former master in an attempt to free his wife from slavery.
Inglorious Basterds star Christoph Waltz is already said to have been cast as the bounty hunter Dr King Schultz, while Pulp Fiction lead Samuel L Jackson may also have a supporting role in the film.
Smith is believed to be willing to take a salary cut from his usual asking price of $20 million in order to be involved with the project, in the same way that Brad Pitt accepted a pay cut to star in Tarantino's last film Inglorious Basterds.
Smith is currently in the process of filming Men in Black 3 opposite both Tommy Lee Jones and Emma Thompson.
Django Unchained will begin production later this year for an expected release in 2012.