The 30-year-old has been on the periphery of the Hibs first team all season and new manager Shaun Maloney is prepared to let the popular playmaker depart Easter Road this month.
Allan has six months remaining on his contract and The Scotsman understands that Hibs may be prepared to let him leave for nothing in order to further the former Celtic player’s first-team football opportunities.
Allan almost left Hibs last summer for St Mirren in the deal which also involved Jamie McGrath moving in the opposite direction, but the transfer fell through at the last minute.
Hibs have also told Swedish midfielder Melker Hallberg and left-back Sean Mackie that they can leave the club this month.
Martin Boyle has already been sold to Saudi Arabian side Al-Faisaly, but new boss Maloney has moved to recruit six players – with Demetri Mitchell the latest.