According to Variety, Smith and Hanks have been offered roles and are still in early negotiations to star with neither actor committing to the project yet.
Smith would potentially appear in the remake as the father of the children who meet and become friends with the flying Dumbo after seeing him perform at the circus with Hanks being considered to portray the film's villain.
Dumbo, which has a script by Ehren Kruger, is said to be a top priority for Disney who has seen success with other live-action adaptation's including Alice in Wonderland, Maleficent, Cinderella, The Jungle Book and the upcoming Beauty and the Beast.
Smith, who is currently filming fantasy cop thriller Bright for Netflix, will reportedly have the third entry in his Bad Boys series Bad Boys for Life alongside Martin Lawrence and director Joe Carnahan to consider as shooting schedules would conflict with Dumbo.
Hanks meanwhile is considering a role in World War II drama The Grey Hound in place of Dumbo Empire reports.