The new decision is set to become effective from 15 January next year.
Smart bags are new types of luggage that are equipped with GPS tracking, Bluetooth, weighing scales, and USB charge ports.
The bags’ batteries are prone to overheating, posing a significant fire hazard during a flight.
The airline company noted that smart bags with removable batteries will be allowed.
Other airlines such as American and Alaska airlines have announced new limits on smart bags, with United Airlines expected to announce new policy soon, reported Philly.com.
In 2015, Delta banned hoverboards and other battery-powered self-balancing personal transportation devices citing similar safety concerns.
Last year, Delta equipped its aircraft with in-cabin containment bags that can be used to store overheated or ignited devices with lithium-ion batteries.