A source told ESPN it is a one-year deal.
The 31-year-old Smith adds to what was already a deep collection of edge rushers in Seattle. The Seahawks re-signed Carlos Dunlap and Benson Mayowa, added Kerry Hyder and return Jamal Adams, L.J. Collier, Alton Robinson, Rasheem Green and Darrell Taylor.
After being reinstated from an indefinite suspension that lasted from 2016 to 2019 for multiple off-field incidents and violations of the NFL's substance abuse policy, Smith joined the Cowboys in 2020 on a one-year deal worth up to $4 million based on certain incentives.
The Seahawks had strong interest in Smith last offseason before he signed with Dallas, a source told ESPN.
Smith was informed on March 24 that he would not be re-signed by the Cowboys, a source told ESPN.
He started the 2020 season strong with a three-sack outing in Week 3 against the Seahawks, but he finished the year with five sacks. He was second to DeMarcus Lawrence on the Cowboys with 33 quarterback pressures and had 48 tackles, five tackles for loss and two fumble recoveries, returning one for a touchdown.
Smith played in every game, seeing action on 808 defensive snaps -- the most among Cowboys defensive linemen and fourth most on the defense. All that work may have played a part in a late-season fade and some injuries.
He quickly rose to stardom with a record 33.5 sacks in his first two NFL seasons with the San Francisco 49ers, with that total rising to a record 42 after three seasons. However, Smith got sidetracked off the field.
In 2013, Smith was arrested on suspicion of DUI after crashing his truck into a tree in a residential neighborhood in San Jose, California. In 2014, the NFL suspended him for nine games for violating the league's personal conduct and substance abuse policies.
In August 2015, Smith was released by the Niners the day after he was arrested on hit-and-run, DUI and vandalism charges. He signed with the Raiders a month later but was suspended for a year for violating the league's substance abuse policy.
Smith was released by the Raiders in 2018 after he was arrested on multiple charges, including domestic violence, assault and false imprisonment. Smith pleaded no contest to a pair of misdemeanor charges in November 2018 to settle his domestic violence case from earlier that year.
ESPN's Brady Henderson contributed to this report.