Smith, 21, has spent time on loan with both QPR and Norwich City in the last two seasons, but has made only one appearance so far at Chelsea.

He is the second new arrival of the summer at Hillsborough following the capture last month of Burnley midfielder James O'Connor.

Laws said: "I'm really pleased to be getting Jimmy on board.

"He's a high-energy player with an abundance of natural talent and I'm extremely confident he can make a difference to our midfield."

Following the departure of captain Lee Bullen, Laws has appointed defender Richard Wood as team captain for the coming season and veteran Steve Watson as club captain.

Laws said: "Richard will be team captain out on the pitch – he has the authority, and he's a player who is so enthusiastic – Steve will be in control of the PR side off the field.

"There's a lot of involvement regarding captaincies in the modern day."

The Owls, meanwhile, have officially denied that any talks took place at Hillsborough on Tuesday with prospective investor Geoff Sheard.

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