According to the suit filed in U.S. District Court, Smith was obligated to re-pay the Niners for part of his signing bonus after being suspended nine games in 2014 for failing a drug test.
The suit says Smith has paid $844,396.82 of the $1,186,027 that he owed the team. The 49ers are seeking $341,630.18.
Smith was released by the Niners after an arrest in August 2015 and joined the Oakland Raiders. He was suspended in November 2015 for violating the league's substance abuse policy and is still seeking reinstatement.
Smith's agent did not immediately return a request for comment.