The Hollywood star will take over the role made famous by Robin Williams in the original 1992 animated film.
He will take over the role of the Genie from the late Robin Williams, who memorably played the part in the original animated film.
Canadian actor Mena Massoud, a relative newcomer, will join Smith in the film as the titular street urchin.
British actress and Power Rangers star Naomi Scott was also announced as Princess Jasmine.
The original 1992 production was the highest grossing film of the year and won two Academy Awards - best score and best song for A Whole New World.
The script for the film has been written by John August, who wrote Big Fish, and will be produced by Sherlock Holmes producer Dan Lin.
It is due to start filming in London this August but does not yet have a release date.
Among the roles yet to be announced are the villainous Jafar, his sidekick Iago and Princess Jasmine's father, the Sultan.
The Aladdin cast was among the announcements made at Disney's fan exo D23, which is taking place in California.
It is one of several live-action remakes currently planned by Disney, who are also working on new versions of Mulan, Dumbo and The Lion King.
The House of Mouse also released a behind-the-scenes look at the latest Star Wars film and the first trailer for Ava DuVernay's A Wrinkle In Time at the expo.