The livewire halfback, who played every game for the Highlanders this season, and has only ever played for the southern franchise since he made his debut in Super rugby in 2011, signed with the national union over the weekend.
He has signed on to wear the black jersey until the end of the 2016 season.
Usually when these deals are announced with the national union, a contract for the player to stay on with his franchise is also released at the same time.
The Blues announced over the weekend they have re-signed props Tony Woodcock and Charlie Faumuina for the same length of contracts as the national union deals, which also came out over the weekend.
Woodcock has signed until the end of next year while Faumuina's deal is for two more years.
The Highlanders as a franchise do not confirm signings until all the paperwork is completed.
Smith has yet to sign on the dotted line for the Highlanders although the franchise remains confident he will stay with the side.
He has a house in Dunedin, enjoys playing under the roof at Forsyth Barr Stadium, has spoken of his desire to stay with the franchise, and his outstanding play for the team this year has sealed his position as the No1 halfback in the country.
But this is professional sport and players do move. And money does talk.
If he does look to play somewhere else, the Blues appear to be the only possible option for Smith.
The Chiefs and Hurricanes both have on their books All Black halfbacks who have long-term deals while Crusaders halfback Andy Ellis may be going to play in Japan next month but he is committed to returning to Christchurch next year.
The Blues would love to have a player of the capability of Smith on their books.
They have lost the experience of backs Piri Weepu and Ma'a Nonu for next season and also with it their big-money contracts.
The Blues were in the market for a classy inside back, eying up Beauden Barrett but missed out on the Taranaki man, as he remained with the Hurricanes.
The Blues have re-signed young halfback Bryn Hall until 2016 but, along with Weepu gone, the franchise's third halfback, Jamison Gibson-Park, has an unclear future due to a season ruined by injury.
The Blues have deep pockets and, although the most any Super rugby player can be paid under the players' collective agreement is $180,000, that can be topped up third-party deals.
The Highlanders may be looking for financial help for backers to try to get Smith to stay. It has done that before to get the likes of Hosea Gear down south.
Smith actually has a connection with the Blues. He was part of the side's wider training group in 2010 but never took the field.
Smith (25) has played 29 tests since making his All Black debut in 2012.
He has played 61 games for the Highlanders since 2011 and had not missed a game in the past three seasons.