The Oilers announced the move, rumoured Sunday, on their Twitter feed. The deal is worth $14 million US.
The 27-year-old, who was scheduled to become a free agent this summer if he can’t reach a deal with the Oilers, had five goals and 15 points during the 2011-12 campaign.
The Czech native has scored only one goal and three assists this season.
Smid has played all 443 NHL regular season games with Edmonton, totalling 10 goals, 52 assists and 361 penalty minutes, with a minus-40 rating.