Payne, who arrived at the John Smith's Stadium from Southend United last summer, made 24 Championship appearances in his debut season, scoring in the wins against Preston North End and Newcastle United.
The 22-year-old attacking midfielder was hoping to get the chance to showcase his skills in the Premier League this term but, after the busy summer transfer window, it appears a loan exit is on the cards.
Manager David Wagner has added Steve Mounie, Aaron Mooy, Tom Ince, Laurent Depoitre, Scott Malone, Zanka, Elias Kachunga, Danny Williams, Jonas Lossl and Kasey Palmer to his ranks.
Payne is expected to slip down the pecking order for the Terriers due to the influx of players and reports are now suggesting Oxford United have won the race to sign the Englishman on a season-long loan deal.
League One outfit Charlton Athletic were said to be showing an interest but The U's, who are managed by former Swansea City assistant Pep Clotet, have managed to persuade Payne to make the switch to the Kassam Stadium.