Other stages to be removed include Lilyworld, Local Produce and the Orange Stage in the venue's smaller arena behind the main stage. Kiwi bands will perform on the bigger stages amongst overseas acts, while the Boiler Room is staying put.
Smith defended the changes, saying they added "spice" and "newness" to the Big Day Out, but said without them there would be no Auckland leg of the Australasian festival.
He said his team had been working furiously to "keep the Big Day Out in New Zealand".
"The changes are vital for us to hold the show in Auckland," he said.
"It's a very expensive show ... we needed to look at rebuilding it from the ground up. We want to make sure we still have a Big Day Out here."
He said West had been "amazing" to deal with after he was taken off the bill. Fans who had already bought tickets were offered a $20 merchandise voucher. Refunds were available until November 30.
He advised anyone wanting to see the Gold Digger rapper perform to head to one of the Australian Big Day Out legs he was still playing at.
Smith later tweeted: "2nd announce done. Nero and Noel. I'm excited. Some other news I know a bit weird. But we still have a BDO. My team are awesome. Proud."
In a statement, Big Day Out organisers reported West had also been removed from the Perth and Adeleide events.
"For our 20th year we have chosen to rebuild the Perth and Adelaide events from the ground up, with a goal to recapturing the magic of early Big Day Out shows," the statement said.
"Triggered by the need to change venues and the limited space available at our new site we have decided to look back to see the future for BDO.
"We are not just moving the show to a more suitable venue but changing the entire design. We are excited the bands are into the idea and we know you will be too. One main stage, no D barricade, Skating & Skate stage in the main arena, Green stage, Boiler Room, Giant Water Slide, Show 'N' Shine and much, much more!"
As well as the changes, 20 new bands have been added to the Big Day Out line-up today, including rap group Das Racist, indie-rockers The Vaccines, metallers Cavalera Conspiracy, dubstep king Nero and Noel Gallagher's High Flying Birds.
Other bands named in today's second and final line-up announcement include Kimbra, Parkway Drive, Regurgitator, Midnight Youth, Six60, Mt Eden, The Adults, I Am Giant, Cairo Knife Fight, Jakob, Bulletproof, Junica, @Peace, DJ Sir-Vere and Nik D.
The 20 new bands join previously announced headlining acts Soundgarden, My Chemical Romance, Kasabian, Battles, Cage the Elephant, Girl Talk, Royksopp and Foster the People on the bill.
A top selection of New Zealand bands will also make up the day, including Gin Wigmore, Unknown Mortal Orchestra, David Dallas, Cut Off Your Hands, Beastwars and Ghostwave.
Another star attraction will be American skateboarder Tony Hawk who brings his Vert Jam Show to the festival.
The Big Day Out will be held at Mt Smart Stadium on January 20.
Second line-up announcement:
Noel Gallagher's High Flying Birds
Nero
The Vaccines
Cavalera Conspiracy
Regurgitator
Kimbra
Parkway Drive
Midnight Youth
Das Racist
Six60
Mt Eden
The Adults
I Am Giant
Cairo Knife Fight
Jakob
Bulletproof
Junica
@Peace
DJ Sir-Vere
Nik D
First line-up announcement:
Soundgarden
Kasabian
Battles
Cage The Elephant
Best Coast
Mariachi El Bronx
My Chemical Romance
Unknown Mortal Orchestra
Gin Wigmore
Girl Talk
Royksopp
Foster The People
David Dallas
Cut Off Your Hands
Beastwars
Ghostwave
Mayavanya
The Living End
- Herald online
