This paper presents a new distributed multi-agent scheme for reactive power management in smart coordinated distribution networks with renewable energy sources (RESs) to enhance the dynamic voltage stability, which is mainly based on controlling distributed static synchronous compensators (DSTATCOMs). The proposed control scheme is incorporated in a multi-agent framework where the intelligent agents simultaneously coordinate with each other and represent various physical models to provide information and energy flow among different physical processes. The reactive power is estimated from the topology of distribution networks and with this information, necessary control actions are performed through the proposed proportional integral (PI) controller. The performance of the proposed scheme is evaluated on a 8-bus distribution network under various operating conditions. The performance of the proposed scheme is validated through simulation results and these results are compared to that of conventional PI-based DSTATCOM control scheme. From simulation results, it is found that the distributed MAS provides excellence performance for improving voltage profiles by managing reactive power in a smarter way.