Smith came through the ranks at home-town club Barnsley making forty-four appearances for the Tykes as a teenager.
He played 35 games in League One for Barnsley, including 17 last season when the Oakwell club was promoted to the Championship.
A player with pace and a good engine, Smith was in the Barnsley side beaten by Middlesbrough in the FA Cup in 2015.
He spent a month on loan at Crawley Town earlier this year and had originally been offered a new contract at Barnsley.
That was subsequently withdrawn following discussions between the Board and coaching staff at the Yorkshire club.
Former Gateshead left-back Paul Heckingbottom took over at the Tykes helm, originally in an interim capacity, when Lee Johnson left for Bristol City in February.
Smith, 20 in August, made his Barnsley debut at Preston North End on December 2014 in front of a near 14,000 crowd at Deepdale.
Smith has now decided to move to Tyneside to continue his football education under Neil Aspin and Lee Nogan at Gateshead.
"I'm delighted to bring Smith to Gateshead, a player who has played a good number of games for Barnsley for one so young," said Aspin. "We've got eighteen players so there was room for a couple more. He will add competition in the defence and when we have around the twenty-mark we'll have enough to compete".