The Prison Service say they are investigating the circumstances surrounding how Mr Smith’s erroneous release.
Smith is charged with the murder of Belfast man Stephen Carson, who was shot dead in his home in front of his nine-year-old son and partner in February 2016.
Police have described him as “dangerous” with “an extensive history of violence”.
He had previously applied for High Court bail which was rejected following police objections.
A PSNI spokesperson said: “Police are seeking information as to the whereabouts of a prisoner who has failed to return to Maghaberry Prison.
“Michael Lawrence Smith, aged 38, was released erroneously by the Prison Service on Tuesday 7 March and has failed to return to the prison. Mr Smith, who is currently on remand for murder, had previously applied for High Court bail for this offence. Police strenuously objected and bail was refused.”
Detective Superintendent Kevin Geddes added: “Michael Smith, who is deemed as dangerous, was last seen in the Belfast area at 2pm on Tuesday 7 March. “He has an extensive history of violence and I would urge the public not to approach him but contact police immediately.
“I would ask Mr Smith to hand himself in to the authorities without any further delay and ask anyone who knows of his current whereabouts or who has any information to contact police on 999.”
A spokesperson for the Northern Ireland Prison Service said: “The matters surrounding the erroneous release of Michael Lawrence Smith are currently under investigation. The Prison Service would urge anyone with information on his whereabouts to contact the Police immediately.”