Image smoothing is a fundamental technique in image processing, designed to eliminate perturbations and textures while preserving dominant structures. It plays a pivotal role in numerous high-level computer vision tasks. More recently, both traditional and deep learning-based smoothing methods have been developed. However, existing algorithms frequently encounter issues such as gradient reversals and halo artifacts. Furthermore, the smoothing strength of deep learning-based models, once trained, cannot be adjusted for adapting different complexity levels of textures. These limitations stem from the inability of previous approaches to achieve an optimal balance between smoothing intensity and edge preservation. Consequently, image smoothing while maintaining edge integrity remains a significant challenge. To address these challenges, we propose a novel edge-aware smoothing model that leverages a relative wavelet domain representation. Specifically, by employing wavelet transformation, we introduce a new measure, termed Relative Wavelet Domain Representation (RWDR), which effectively distinguishes between textures and structures. Additionally, we present an innovative edge-aware scale map that is incorporated into the adaptive bilateral filter, facilitating mutual guidance in the smoothing process. This paper provides complete theoretical derivations for solving the proposed non-convex optimization model. Extensive experiments substantiate that our method has a competitive superiority with previous algorithms in edge-preserving and artifact removal. Visual and numerical comparisons further validate the effectiveness and efficiency of our approach in several applications of image smoothing.