The deal is for three years and $9 million, a source told ESPN NFL Insider Adam Caplan.
Smith, who is known as a blocking tight end, started 10 games last season for the Bills. He caught seven passes for 42 yards and one touchdown.
The Bills weren't expected to re-sign Smith but are expected to upgrade at tight end this offseason. The Bills are preparing an offer sheet for tight end Charles Clay, who the Miami Dolphins assigned the transition tag, a source told ESPN NFL Insider Chris Mortensen.
Smith leaves the Bills after four seasons in Buffalo. He was originally a fifth-round pick of the New England Patriots in 2011.
In addition to Smith, the Bills had eight unrestricted free agents who hit the open market Tuesday afternoon.