Smith, the world's number one Test batsman, was sacked and sent home in disgrace after the third Test against South Africa in March.
He later accepted a 12-month ban from all international and domestic games by Cricket Australia for his role in the ball-tampering scandal that rocked the sport.
Cricket Australia told AFP Smith had the support of the governing body to play in the Canadian event.
He had been on a $1.9 million contract with Indian Premier League side Rajasthan Royals but stepped down amid the scandal.
David Warner, who was the vice-captain, was also banned for 12 months and Cameron Bancroft was suspended for nine months.
Warner is set to make a return to the field in September with Sydney's Randwick Petersham. Bancroft was last week cleared to play club cricket in Western Australia.
The Canadian tournament will be held at Maple Leaf Cricket Club near Toronto from June 28-July 15 and feature six teams representing Toronto, Vancouver, Montreal, Edmonton and Winnipeg along with a Caribbean side.
Teams are to be selected on May 30 via a player draw.
Chris Gayle, Shahid Afridi, Dwayne Bravo, Lasith Malinga, Chris Lynn, Darren Sammy, David Miller, Sunil Narine and Andre Russell were also named as marquee players.
chris gaylecricket australiaGlobal T20 CanadaMaple Leaf Cricket ClubRajasthan RoyalsShahid Afridisteve smithSunil Narine
First Published: May 25, 2018, 8:06 AM IST