The moves comes after Friday's deal that sent Tomas Jurco to the Chicago Blackhawks for a 2017 third-round pick.
"About a week to 10 days ago, I started talking to Anton Thun, his agent, about the possibility of an extension," Holland told Mlive.com. "I told Anton I wanted to be up front, that we traded a lot of picks over the years and that if I got the opportunity before we finalized anything to acquire some assets I couldn't pass up, I was going to go in another direction."
The 2018 pick originally belonged to Ottawa.
The Wings are in an unusual position, sitting last in the Eastern Conference with 58 points in 60 games.
Normally at this time of year, the discussion for the Wings is whom to acquire for the playoff run.
"We haven't been in this position in 20-plus years," Holland acknowledged. "We made the decision in the last few days that if I could get some picks for our players I was going to make it happen."
The Wings originally drafted Smith with their first-round pick, 27th overall, in the 2007 draft.
"I like Smitty," Holland said. "He can skate, he's mobile, he's physical, he plays with an edge, he plays lots of minutes. He'll be a real good addition for the Rangers."
Although Smith had expressed a preference to stay with the only organization that he's ever known, he joins a Rangers team that is fourth in the Eastern Conference with 82 points in 62 games.
Smith tweeted, "It was a pleasure to be a part of an outstanding organization like the Detroit Red Wings - thank you for everything!"
Smith will also be reunited with good friends Ryan McDonagh and Derek Stepan, fellow University of Wisconsin Badgers.
Smith, who just turned 28 on Feb. 8, had two goals and three assists in 33 games with the Wings this season. He missed 24 games in two separate stints with a knee injury.
For his career, Smith had 15 goals and 52 assists in 291 games with Detroit.
The Rangers host the Washington Capitals tonight.
"He's a vocal guy," Wings captain Henrik Zetterberg said. "Had a great career here with us. Wish him a best. He's going to be a good fit in New York for them. We'll see if he makes the game tonight."
The Wings now possess 10 picks in the 2017 draft, including three picks in the third round and two picks in the sixth round.
"It was a great opportunity to get more draft picks," Holland said. "Hopefully we can find some players with those picks."
SPROUL GETS ANOTHER CHANCE: Wings coach Jeff Blashill has emphasized the team must maintain their culture of excellence, no matter what trades are made.
"I certainly wish Brendan luck," Blashill said. "I hope he goes and plays well for them. But our focus is on us trying to win a hockey game tonight."
While Smith heads to New York, the door is now open for Ryan Sproul to return to the lineup as the Wings now have just six healthy defensemen.
"I think one of the tough things in life and certainly one of the tough things about making it in this business is it's hard to have confidence if you're constantly looking over your shoulder," Blashill said. "So I think if you get put in a situation where you have the knowledge that you're going to go back in even if you might have a tough game or you go back in when you make a mistake, as long as you have inner drive then that can be a positive thing. Ryan's got inner drive. If Ryan comes and plays his best hockey, he'll help us. He's got to make sure he's assertive, he's got to make sure he attacks the game, he's got to make sure he takes a hit to make a play."
Sproul said he was willing to do whatever Blashill wanted to remain in the lineup.
"Try to earn some trust it looks like. I'm going to do my best to do that," Sproul said. "Do whatever he wants me to do to be able to stick in the lineup. I'm kind of getting sick of being in and out, so hopefully I can stick in the lineup."
Sproul has played in 24 games this season and has one goal and and six assists. "The games I've been in I have gotten shots through and I have played pretty well offensively," Sproul said. "I think he's looking more for the defensive part, so I'm still working on that.
"I've had an opportunity to go into games but I need to stick with it. My plan from here on in is to play the rest of the season, hopefully, and that's definitely my goal."
Blashill said the team plans to call up another defenseman before Friday night's game in Calgary.
VANEK PREPARING TO PLAY: Although Thomas Vanek's name has been mentioned frequently as a strong trade possibility, Vanek participated in the morning skate at Rogers Arena along with his teammates.
"I'll get ready for the game and until I get a phone call I'll be ready to go for tonight," Vanek said. "Obviously, I'm aware of the situation. It could happen anytime. I've been through it before, so it's no surprises for me. I'll just be ready for tonight, if I'm in."
Vanek said his oldest son, Blake, who is nine, is very aware of the trade deadline and the possibility that his dad could be moved.
"I think he's asking me more questions than you guys," Vanek said. "That's because he's a fan of the league. He's a kid, he's interested in it. The family side, that's always the toughest part of moving and getting the logistics and figuring out where you're going and how much you're going to see them in the next few months. But again, that's the bad part of being traded, but you go somewhere good, you have a shot, you're happy about that."
CANUCKS IN SIMILAR SPOT: The Wings' opponent tonight, the Vancouver Canucks, are in a similar spot, sitting in 11th place in the Western Conference with 58 points in 61 games.
"It's not easy," Zetterberg said. "You see teams go through this all the time. We have done it on the fly for the last probably 10 years. We're still not out of it. That's the message we have here. We still have 22 games to get on a roll and get close."
Zetterberg has played with Henrik and Daniel Sedin on Team Sweden in international competitions and has faced them many times.
"They're obviously really good players," Zetterberg said. "They're good handling the puck, protecting the puck so the easiest way to play against them is to have the puck yourself, so face-offs are important. Once they have the puck you have to play as a five-man unit and minimize their time and space."
Henrik Sedin has 12 goals, 25 assists and is minus-20 in 61 games while Daniel Sedin has 13 goals, 22 assists and is minus-10.
Zetterberg leads the Wings with 46 points (tied for second on the team to Vanek in goals with 14) in 60 games and is plus-10.
Daniel Sedin was the second overall pick in the 1999 draft, one slot ahead of Henrik Sedin.
The Wings took Zetterberg in that same draft in the seventh round with the 210th overall pick.