Smith will stay in charge at Headingley Carnegie Stadium until the end of the season, from when he will become full-time coach ahead of the 2008 World Cup in Australia where he will take charge of England.
"Britain has some of the best young players in the world and my job will be to develop this crop of players into the best team in the world," said Smith after his appointment was confirmed.
Previous coach Brian Noble stepped down from the role after the RFL announced that the Great Britain job would become full-time and he decided to concentrate on his jclub coaching with Wigan Warriors.
"It has been a lengthy process finding a new Great Britain coach," said RFL executive chairman Richard Lewis. "With no international matches until June we were prepared to take whatever time was necessary to ensure we found the right man.
"We had applicants from all over the world for this role which shows how highly regarded the job of Great Britain coach is – but one candidate stood out from the rest and that man is Tony Smith."
"I want Tony to challenge us all to move ourselves from number three in the rankings to the top of the world," added Lewis. "I want Great Britain and, after this year, England to be the best in the world."