He is to take on specific responsibility for national counter-terrorism and cyber crime in the press.
Smith is also expected to oversee media relations with regard to Afghanistan.
The National Security Council was set up last May to oversee all aspects of Britain's security, led by Sir Peter Ricketts.
The Council is chaired by the Prime Minister David Cameron.
Smith formerly worked at the Foreign and Commonwealth Office, when he was press spokesman for minister Kim Howells.
He will report to Ricketts and the prime minister.
A recruitment process is under way to find a replacement for Smith in Downing Street.
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