The Celtics announced Thursday that Smart had re-signed but did not disclose terms.
"This is where I want to be, and I'm ready to put a green jersey back on and get to work," Smart said in a statement. "I'm determined to help my teammates bring another championship to the best fans in the world."
The Celtics scheduled a news conference for Thursday, but sent a statement canceling that event because Smart "experienced flu-like symptoms earlier this afternoon and is currently receiving IV fluids" at a hospital. The team said he is expected to be available via conference call "in the coming days."
Smart, the No. 6 pick in the 2014 draft, found a quiet market in restricted free agency and, after his camp grumbled about Boston's lack of attention early in the summer, the two sides eventually hammered out a deal.
The deal is a victory for Smart's camp, which turned down a similar extension offer before the start of the season, according to sources. With Smart receiving no formal offer sheets this month at the start of restricted free agency, the Celtics could have simply waited for Smart and his agent to settle for a $6.1 million qualifying offer by Oct. 1.
Instead, the Celtics gain some security at point guard, one summer before All-Star Kyrie Irving is scheduled to reach unrestricted free agency. (Terry Rozier would be a restricted free agent if no extension is reached).
Boston also gets a much-needed contract value it could use further out in trade scenarios. Before Smart re-signed, the Celtics did not have a salary for the upcoming season between $6.7 million (Jayson Tatum) and $21 million (Irving).
In extending Smart, the Celtics will also plunge into the luxury tax this season, something president of basketball operations Danny Ainge said recently he expected.
With a payroll that soon could bloat even more if Irving re-signs for big money next summer -- and with younger players like Tatum and Jaylen Brown positioning for lucrative extensions -- the Celtics are showing a commitment to their current core by qualifying for the luxury tax this soon. More expensive repeater taxes could loom down the road if Boston keeps its core intact.
Smart, 24, averaged 10.2 points, 4.8 assists and 1.3 steals over 29.9 minutes per game last season. He's often maligned for his shooting -- 36 percent overall for his career, including 29.3 percent beyond the 3-point arc -- but Celtics brass rave about his defensive tenacity and the way he impacts games.
Smart appeared in only 54 games last season after injuring his hand twice -- first while punching a glass picture frame in frustration, then tearing a ligament while diving for a loose ball. Smart returned into the playoffs and helped the Celtics surge to the Eastern Conference finals before bowing to the Cleveland Cavaliers in seven games.