Smith was named on Friday as captain of Australia's Test teams.
The 26-year-old will take over from Michael Clarke who announced his retirement on 8 August after his side lost the fourth test against England.
That defeat by an innings and 78 runs gave England a 3-1 lead in the five Test series allowing them to reclaim the Ashes trophy they lost during their tour of Australia at the end of 2013.
David Warner, 28, will be the Australia Test team's vice-captain.
As soon as Clarke said he would step away from Test cricket, Smith was favourite to take charge. He skippered Australia in Tests against India at the start of the year when Clarke was sidelined with a hamstring injury.
Back then at 25 years and 195 days, he became Australia's youngest Test captain since Kim Hughes took over the leadership in March 1979 at 25 years and 57 days and the third-youngest in Australian cricket history behind Ian Craig who was just 22 when he was given the role in 1958.
"When Michael made his decision to retire last week it was a very straightforward decision for us to nominate Steve as his successor," national selector Rod Marsh said in a statement.
"He has big shoes to fill but everything about him suggests he is the right man for the job. At 26, he is a fine young man with extraordinary talent, excellent leadership qualities and a terrific temperament.
"He is highly regarded by the selectors and we congratulate him on being appointed to the role on an ongoing basis. He should be incredibly proud."
Smith's appointment was endorsed at Cricket Australia's August board meeting on Friday. His first outing in his new position will be against Bangladesh in September and October.
Cricket Australia chairman Wally Edwards said: "We have all seen Steve Smith's clear leadership potential and believe he can perform an excellent job for Australian cricket over many years."