Senator Smith was flanked by Labor's leader in the Senate Penny Wong and deputy leader in the Senate Don Farrell.

Senator Smith made the oath on a bible before being congratulated by his fellow senators from both sides of the chamber. He then took his seat behind his Labor colleagues, closest to Senators Lisa Singh from Tasmania and Murray Watt of Queensland.

It comes just 24 hours after Ms Wong said on ABC's Insiders that she wanted former senator Katy Gallagher to be back in the Senate, which would come at the expense of Mr Smith.

"In terms of preselection for the next election, Bill Shorten has made clear, I have made clear, as have other senior leaders and senior members of the Labor Party both at the territory level and federally, that we want Katy back in the Senate," she said.

"She is a very important part of our Senate leadership team. As Senate leader, I want her back and I know Bill and others do as well."

While Mr Smith has labelled the comments "disappointing," he denied any awkwardness after the Senate leader had backed Ms Gallagher instead of him.

Former ACT chief minister Jon Stanhope has revealed that he will vote for Katy Gallagher in the preselection race against Senator Smith, coming after he had previously said he hoped Mr Smith would stand aside and create a casual vacancy which could then allow Ms Gallagher to return.

"I thought it would have been appropriate in the circumstances," Mr Stanhope said on Monday afternoon.

"My opinion hasn't changed but I accept that it's a position David has chosen not to take and I respect that it's David's right to do so," he said.

Mr Stanhope said that he wished Mr Smith all the best and on one level he "applauded" his decision to contest the preselection, as he is in favour of active preselection processes.

"At the heart of the point that I make, the people of Canberra are actually voting quite clearly, the person that they preferred for that position above all others, including the Liberals and the Greens, was Katy Gallagher."