Corporal Smith had been part of an NZSAS squad that was supporting an Afghan crisis response unit when the British Council office in Kabul came under attack.
Corporal Grant was shot and wounded in the chest as he rushed up a stairwell. Without hesitation, Corporal Smith requested permission to rescue him.
Under covering fire, and with insurgent bullets flying around him, Corporal Smith leapt a wall and ran across open ground to give Corporal Grant first aid. His injured colleague was removed to a waiting helicopter but died en route to hospital.
Corporal Smith then returned to help blow a hole in the wall of the compound and provide covering fire for the British hostages.
"There is no honour that can substitute for a human life, for a grandson, a son, a brother, an uncle and a mate.
"And yet in this award, I hope that Lance Corporal Smith's family can take some solace in remembrance of the courageous man who was taken before his time."
Also honoured was an air force pilot who managed to land a helicopter under intense gunfire in Afghanistan, despite a hail of bullets pinging off the cockpit.
Squadron Leader Benjamin Pryor, 38, received the New Zealand Gallantry Medal for his actions while on loan to the Royal Air Force.
He was also honoured for a casualty evacuation under heavy gunfire in Afghanistan's Southern Helmand province on May 21 last year.
Sir Jerry said Squadron Leader Pryor's brave actions had brought great credit to himself and the New Zealand Defence Force. APNZ