The loss of the 82-test veteran comes at a difficult time in the season for the Dunedin-based franchise.
The club have not won a match since their tight 36-31 win over the Reds at Forsyth Barr Stadium over a month ago, and have endured three consecutive away losses to the Rebels, Hurricanes and Blues.
A chance to overturn their dismal run of form against the Crusaders in a home derby two weeks ago was robbed as the match was cancelled due to the Christchurch terror attacks.
Both teams shared two competition points in a result that has been officially registered as a 0-0 draw, but a lack of wins leaves the Highlanders outside of a play-offs position, sitting in ninth place with 13 points to their name.
Smith’s absence for at least the next month will not help the Highlanders’ bid for victory, particularly with a run of four New Zealand derbies in their next five matches.
Back-up halfbacks Kayne Hammington and teenager Folau Fakatava will be called upon to fill the void left by Smith, while former Crusaders halfback Jack Stratton has been drafted into the squad as an injury replacement.
The Highlanders have the bye this week before they host the Hurricanes next Friday.
Watch – Raelene Castle on Sunwolves axing:
Sign up to our mailing list here and we’ll keep you up to the minute with weekly updates from the world of rugby.