Smith will succeed Sir Crispin Davis, who has been chief executive of Reed for nine years and has led its transformation into a digital information services company.
He will join the board of the business media group on January 1 as CEO-designate, before taking up the full position upon Davis's departure in March.
Jan Hommen, Reed's chairman, said: "Ian Smith is an outstanding business leader who will build on Reed Elsevier's strong foundations of global business leadership positions, a growing digital presence and a dynamic management team.
"We are delighted to welcome him to the company to take Reed Elsevier through the next phase of our growth."
Davis said: "With a high quality management team and talented people across the world, we have successfully done this and I am honoured to have led Reed Elsevier during this important phase of our development."
Smith's last management role was chief executive of Taylor Woodrow, which he joined in January 2007. He left after overseeing its summer 2007 merger with George Wimpey.
His previous roles include: chief exectuive of General Healthcare Group, where he improved business performance; CEO of Europe, Middle East and Africa at Exel Group, where he oversaw its transformation from a freight management business into an integrated logistics supplier; and European CEO of consultancy firm Monitor.
He began his career at Royal Dutch Shell, progressing to become one of the country CEOs in the Middle East.
Smith said: "Reed Elsevier is renowned for its reputation, talented people, world class brands and strong customer relationships.
"I am delighted to be given the opportunity to lead the business and consolidate its position as one of the world's leading professional information companies. Our future looks very exciting."
The announcement comes as Reed Elsevier prepares to sell Reed Business Information -- at the tail end of last month it was reported that the group is unlikely to get more than £1bn for the division after bidders substantially lowered their offers due to the downturn.
The third-round bidders for RBI are Bain Capital, TPG and former Reed non-executive Strauss Zelnick. According to a report in the Financial Times in October, they are considering offers below £1bn, against an initial valuation of £1bn to £1.25bn in July.
They are believed to be concerned about deterioration in trading at RBI, publisher of New Scientist and Farmer's Weekly, as the economy suffers.