Adrian Wojnarowski of ESPN reported the news, although he granted Smart and the Celtics "were relatively close in talks." The lack of an extension means Smart will become a restricted free agent following the 2017-18 campaign.
The news came after Wojnarowski previously noted Monday that Smart and Boston were "engaged in talks" before the 6 p.m. ET deadline.
Smart has been with the Celtics his entire career since they drafted him out of Oklahoma State with the No. 6 overall pick in 2014. He has increased his scoring every season from 7.8 points per game as a rookie in 2014-15 to 9.1 points per game in 2015-16 and 10.6 in 2016-17. He also dished out a career-high 4.6 assists a night in 2016-17 as the Celtics reached the Eastern Conference Finals.
While Smart has become an important piece of Boston's rotation, there are concerns regarding his offensive efficiency. He shot just 35.9 percent from the field and 28.3 percent from three-point range last season.
However, he helps make up for the shooting woes with his defensive prowess. According to NBA.com, opponents shot 1.9 percent worse than their normal averages when Smart guarded them last season, which helped him earn playing time for a title contender.
He is just 23 years old and would immediately bolster the backcourt of another team if it were able to land him in free agency down the line.
Boston's rotation is crowded on the wing with Jaylen Brown, Gordon Hayward, Jayson Tatum and Terry Rozier, which could help account for the potential loss of Smart in the future if it keeps the majority of its core together.