The veteran forward, traded last summer by the Cavs in the deal that brought them All-Star guard Mo Williams, agreed to terms Tuesday night on a one-year contract with Cleveland, his agent told the Cleveland Plain Dealer.
"After careful consideration of his options, Joe has decided that the Cavs are the best fit," agent Dan Fegan told the paper.
Smith can not officially sign with the Cavaliers until he clears waivers on Wednesday. But that's the final procedural hurdle in a signing that has been expected since the 33-year-old Smith bought out his contract on Sunday with the Oklahoma City Thunder.
Smith averaged 6.6 points and 4.5 rebounds in 36 games for the Thunder, but his playing time had diminished and he didn't get in any of his final eight games with the club.
He wanted to join a team for a playoff push and Cleveland, where he played 27 games last season, was Smith's first choice.
The Cavs reluctantly parted with Smith in August, when they packaged him with guard Damon Jones in a three-way deal to acquire Williams from the Milwaukee Bucks. Smith came to Cleveland before the trading deadline in 2008, and the 14-year veteran provided leadership as well as consistent play during his stay.
The prospect of getting him back excited LeBron James.
"One of the best guys, one of the best teammates I've ever had," James said Monday night in Miami.
With Ben Wallace expected to miss three more weeks with a broken leg, the 6-foot-10 Smith will give the Cavaliers needed depth up front and his playoff experience will be invaluable. Smith appeared in 13 playoff games for the Cavs last season.
Smith was the No. 1 pick in the 1995 NBA draft out of Maryland. He has also played for Golden State, Philadelphia, Minnesota, Detroit, Denver, Milwaukee and Chicago. He has averaged 11.7 points in 929 career games and appeared in 39 playoff games.