The 28-year-old has put pen to paper on a two-year deal and will bolster the clubs options on the right side of defence following the departure of Callum Patersom.
Smith was shown round the facilities at Riccarton on Monday after Hearts agreed a transfer fee with his club Peterborough United.
He captained Peterborough at times last season but was transfer listed at the end of the campaign despite playing 44 times for the English League One club.
Coventry City had an offer accepted for the attack-minded full-back, although he chose to travelled to Scotland after hearing of Hearts’ interest.
The player becomes Hearts’ fifth summer signing after Christophe Berra, Cole Stockon, Rafal Grzelak and his international team-mate Kyle Lafferty.
Smith told Hearts TV: “As soon as I got here it was clear this is a massive club and it’s great to be here.
“The facilities, the stadium, the manager, it all seems like a good fit for me. I had a chat with Ian and everything he said was positive and the way he wants to play suits me down to the ground.
“People who know me will tell you I like to attack so hopefully we’ll get on top of teams this season, I think that will suit me down to a tee.”