Tasmania's Bird pipped Adelaide-born fast bowler Chadd Sayers to the last spot with under-fire spinner Nathan Lyon holding on to his place in the pink-ball, third and final Test which starts Thursday (Nov 24).
"Jackson Bird is in," Smith told reporters.
"He took five-for in his last Test match. He's bowled well with the pink ball in the (Sheffield) Shield games he's played.
"He's batted well in the nets here and he deserves an opportunity. So it's unlucky for Chadd (Sayers) to be missing out on his home ground, but we've gone with Jackson Bird."
That means Australia will field three debutants in Adelaide -- English-born opener Matt Renshaw, middle-order batsmen Peter Handscomb and Nic Maddinson. Smith said he wanted to play a spinner in Adelaide, which has a reputation for taking spin.
"We were always keen on playing a spinner in this game and that's the way we've gone with Nathan Lyon," Smith said.
Heavy defeats in the first and second Tests have plunged Australia into crisis, prompting the chief selector to quit and a dramatic team shake-up with six players axed for the Adelaide Test.
David Warner, Matt Renshaw, Usman Khawaja, Steve Smith (capt), Peter Handscomb, Nic Maddinson, Matthew Wade, Mitchell Starc, Josh Hazlewood, Nathan Lyon, Jackson Bird.