An outbreak of Covid-19 means the Premier League side will have to use their Under 23s and academy players for the match against the Reds
The home side will use their Under 23s squad and other academy players for the clash with the Premier League champions, depending on how many test negative for the virus.
In place of Smith, U23s boss Mark Delaney will take charge of the team.
Villa were forced to close their Bodymoor Heath training ground on Thursday after reporting a “significant coronavirus outbreak”.
A number of senior players and staff received positive tests on Monday and began to self-isolate, with a further round of testing yielding yet more positive results on Thursday.
It meant the Villa first-team squad had their training session cancelled a little over 24 hours before they were due to take on Liverpool at Villa Park, in a repeat of the game that ended 7-2 to the home side in the Premier League earlier this season.
There were initial fears that the match would have to be called off and that Villa may have been forced to forfeit as the already-packed calendar means there is precious little time to reschedule the game.
Instead, they will field a team of younger players just as Championship side Derby plan to do when they take on non-league Chorley on Saturday after an outbreak forced their entire senior squad, including interim manager Wayne Rooney, to self-isolate.
Villa’s improvised squad will be a reversal of what happened at the Carabao Cup quarter-final tie between the sides in December 2019, when Liverpool were forced to play a reserve team as the senior squad were playing in the Club World Cup in Qatar on the same day.
Liverpool coach Jurgen Klopp said his side had no positive cases to report before they travel to Villa Park on Friday, but the results from the latest tests are yet to come in.
Asked if his side are in the clear, he told reporters: “Yes, 100 per cent we have no cases in this moment. But the tests from yesterday we don’t have the results yet. But up until then it was all fine.”
The Reds are expected to name the likes of James Milner, Xherdan Shaqiri, Divock Origi, Alex Oxlade-Chamberlain, Takumi Minamino, Neco Williams and Curtis Jones in the squad.
Villa are the latest of a growing number of Premier League clubs to suffer an outbreak of positive cases in recent weeks, which saw four matches postponed during December.
Newcastle’s match against Smith’s side at the start of last month was postponed because of an outbreak at the Magpies’ training ground. Manchester City then had to postpone their match against Everton on December 28 just four hours before kick-off after a number of cases were reported among players and staff.
Two of Fulham’s festive fixtures, against Tottenham and Burnley, were also called off after an outbreak among the Cottagers squad. Sheffield United also reported a number of positive cases, though their fixtures against Burnley and Crystal Palace went ahead as planned.
It is perhaps little surprise therefore that the Premier League reported on Tuesday that a season-high 40 positive cases had been recorded in the latest round of testing.
It comes as the United Kingdom grapples with a surge in Covid-19 cases across the country, fuelled in part by a new, more transmissible variant of the disease.
The rise in cases prompted Prime Minister Boris Johnson to impose a full national lockdown on Monday, though elite sport such as the Premier League has been allowed to continue.
There had been talk of pausing the season for a few weeks to act as a ‘circuit breaker’ and stem the rise of cases. The Premier League denied those reports however, insisting it had faith in the strict hygiene protocols currently in place at training grounds and stadiums.