The Jags made the move Saturday, one day before playing at Washington.
Smith is the first draft pick cut in general manager Dave Caldwell's two seasons. Smith was a fifth-rounder out of Arkansas. If he clears waivers, he will be signed to the practice squad.
Jacksonville made the move because it's down starting safety Johnathan Cyprien (concussion), leaving the team with three healthy safeties.
Loston signed with Jacksonville as a rookie free agent from LSU and spent the preseason with the team before being waived during final cuts. He spent the past two weeks on the practice squad.