Erasmus and his lawyer will meet with representatives of SA Rugby on Tuesday to discuss matters.
"I saw Rassie's value during the time he was with the Springboks. His attention to detail is outstanding," Smit told Die Burger. "He has an immense amount of knowledge and it will be to our disadvantage if we lose him."
Erasmus missed the Springbok team announcement and is only employed as a consultant to SA Rugby and while he hopes a solution will be found, Smit believes Western Province and the Stormers have made a good choice.
"I think it's a fantastic choice. The best about Rassie is his scrupulousness," he said.
Smit is also positive on the entire vibe in the squad heading into the World Cup.
"The vibe is one of the most important things for a successful World Cup campaign and we have been building it since 2004," the skipper said.
"The core players in our squad of 30 know each other very well. It is nice to have guys with the experience of Percy Montgomery and Os du Randt. They have a positive influence on youngsters such as Frans Steyn and Pierre Spies.
"They can't wait to get on the field. It feels like a new beginning, but it has been a three-year process to get here."