Smith took charge after Conor O'Shea stepped down in the wake of Italy's Rugby World Cup campaign in Japan.
With Italy having taken home the wooden spoon from the last four editions of the Six Nations, former Cheetahs coach Smith has a tough task on his hands.
The most intriguing name in his first squad, which includes 35 players, is Benetton Treviso centre Sgarbi, who last appeared for his country in 2014.
"In the squad we have a mix of experienced and young players who want to establish themselves on the international rugby scene," said Smith, who also named uncapped trio Danilo Fischetti, Niccolo Cannone and Michelangelo Biondelli in his selection.
"Everyone's contribution from the start will be fundamental in order to better prepare for the debut in an increasingly competitive and exciting tournament."
Italy begin this year's Six Nations campaign away to reigning champions Wales on February 1.