Smith, 54, was 81-63 while leading the Bears. That includes a 10-6 record this season after Chicago started 7-1 but sagged under a 1-5 slump. The Bears did win their last two games.
The team said Bears General Manager Phil Emery told Smith of the coaching change Monday.
Smith took over the Bears for the 2004 season and the team went 5-11. But Chicago improved to 11-5 in this second season and was 13-3 in 2006, advancing to Super Bowl XLI, which was won by the Indianapolis Colts.
The Bears made the playoffs just one more time with Smith after that -- a run after the 2010 regular season that ended with a loss to the Green Bay Packers in the NFC Championship game.