Smith, 55, had his first job as an NFL assistant as the Tampa Bay linebackers coach from 1996-2000.
He later was defensive coordinator for the St. Louis Rams and was head coach in Chicago from 2004-12. He led the Bears to a 13-3 record in 2006, when they fell to the Indianapolis Colts in Super Bowl XLI.
Smith was 81-63 with three playoffs appearances over nine seasons with the Bears.
He was fired after the team lost five of its last eight games in 2012.
"Today is an exciting day for the Buccaneer organization and the entire Tampa Bay community, as we welcome back Lovie Smith," said Buccaneers Co-Chairman Bryan Glazer.
"Lovie is an accomplished and very well-respected head coach who has enjoyed success at every level of his 30-year career. We knew from the start of our search that he was the ideal man to lead this team into this new era of Buccaneer football."
Smith replaces Greg Schiano, who was fired Monday after two seasons as the Buccaneers' coach. Tampa Bay was 4-12 this past season, tied for third-worst record in the NFL.