The announcement was made during a conference held by Mercedes boss Dieter Zetsche and Renault-Nissan boss Carlos Ghosn, who were speaking at an event held between the joint venture partners.
The electric Smarts, which will also be available in Fortwo cabriolet form, sit on the same platform as the Renault Twingo, which was co-developed by the partners.
The new Smarts will use a modified version of the Renault-developed electric motor that is currently on sale in the Renault Zoe, but will utilise a battery developed by the Daimler-owned company.
There is no news on whether an electric version of the Renault Twingo will be sold, but such a car is unlikely as it would directly compete with the Zoe.
Speaking at the conference, Zetsche said: "The Smart Fortwo has been the best-selling electric vehicle in Germany for three years and we see this new venture as a way of widening that success."
Ghosn commented that the Renault-Nissan alliance currently sells half of all the electric vehicles sold globally, saying that "adding Daimler to our electric motor production brings another layer of scale that helps us build on our EV plans."
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