The 21-year-old is contracted to Manchester City but joins the League One club immediately after agreeing to terminate the deal which took him to Tynecastle last summer.
Constant injuries restricted Smith-Brown to just three appearances for Hearts. The recent arrival of left-back Demetri Mitchell on loan from Manchester United earlier this month signalled the end for the City player in Scotland.
With paperwork completed, he now moves to Oxford hoping to gain more first-team experience.
United’s caretaker manager Derek Fazackerley told the club website: “He’s a good player who has been on our radar for a while now and, when he became available in this window, we moved quickly to bring him here.
“Having played for England through the age groups he fits the bill technically and athletically, and to have played over 30 games in senior men’s football will only have helped him physically and in terms of regular competitive games.
“He is a natural left-back, a position where we have had to play a right-footed player a number of times this season, so that will help us with balance, provides excellent competition for places, and also leaves us less vulnerable elsewhere because of his versatility.”
Smith-Brown said: “I’m looking forward to it. Oxford has a good reputation for helping young players like me learn and develop so it is a fantastic opportunity.
“There are a lot of really good players here and I can’t wait to train for the first time and hopefully be involved at Charlton on Saturday.”