Smart will make $750,000 a year through Feb. 28, 2013, under a deal unanimously approved Tuesday by the compensation committee of the university's board of trustees. He made $360,000 in salary last year plus $72,000 in bonuses.
Smart won the Frank Broyles Award as the nation's top assistant coach. He turned down a lucrative offer from Georgia coach Mark Richt to run the defense at his alma mater.
Smart's contract won't have a buyout if he leaves for a head coaching job, but does require him to pay $72,000 if he takes an assistant coaching possession elsewhere.
Smart directed the nation's No. 2 defense last season.
That bonus will push Smart to the third highest paid defensive coordinator in the country. The SEC now has at least four defensive coordinators making $700,000 or more per year. The other three are Georgia's Todd Grantham, LSU's John Chavis and South Carolina's Ellis Johnson.
Information from The Associated Press and ESPN.com's Chris Low was used in this report.