Smith, 21, has been a top target for Dons boss Neal Ardley throughout the summer and he admitted he is delighted to have landedhis man.
"We looked at a lot of strikers as the summer progressed, including higher profile names, but Michael ticked all the boxes," he told the club's official website.
"I went away and looked at video footage of Michael playing for Colchester last season. I was delighted with what I saw.
"I made phone calls to people I know at Charlton and asked about his character and how he would fit in for us. What came back to us is that Michael is an extremely fit and athletic centre-forward who is a good finisher and very aggressive at the same time.
"We started the process about three weeks ago and Chris Powell has been absolutely brilliant with it all. There had been about seven clubs after him, but Chris was really keen for him to come here and he helped us out in every way."
Smith, who has also enjoyed loan spells with Accrington and Colchester, admitted he cannot wait for the new season to start on Saturday.
He added: "I spoke to the manager Neal Ardley and a few of the lads who have been at the club, including Yado Mambo, and there was a good feeling that came back about Wimbledon.
"I know that I can play at this level because I was in League One with Colchester last season and scored a few goals at Accrington Stanley too. I like to hold the ball up and bring other players into the play, but I also hope to put the ball in the back of the net too."