Richard Hicks, a former town manager of Farmville, will take over from C.L. Gobble, who has been in the position since May.
Gobble said he was being replaced because as a retiree he is only allowed to work full-time for a certain number of months.
The search for a permanent town manager could take up to six months, so the town council decided to hire another interim manager, Gobble said.
The Smithfield Town Council fired Town Manager Eric Williams in May after learning he handed out raises to four department heads, despite the council's decision to withhold raises because of a tight budget.
An investigation by the North Carolina League of Municipalities also determined that some employees were allowed to cash in unused vacation and sick leave.
Town Clerk Debbie Godwin and payroll clerk Lynn Powell quit their jobs after Williams' firing.