The 26-year-old was free to talk to overseas clubs on January 1 over signing a pre-contract agreement while Arsenal and Manchester United are thought to be interested in signing the Kiwi international as a free agent in the summer.
Reid moved to West Ham from ??FC Midtjylland in August 2010 for an undisclosed fee and has gone on to make over 100 appearances for the Hammers, scoring seven times.
Allardyce said: “He has no future at this club. I’ve been in the game long enough to know that he’s leaving at the end of the season. (It’s) highly unlikely that he’ll stay.”
Reid moved to Denmark at the age of 10, representing the Scandinavian nation at Under 19, U20 and U21 levels before switching international allegiance to the country of his birth in early 2010.
He started all three of New Zealand’s matches at the 2010 World Cup in South Africa, scoring in the 1-1 draw with Slovakia as the All Whites exited the tournament at the group stage.
Reid has won 18 caps, scoring once for his country.