The hexatic phase predicted by the theories of two-dimensional melting is characterized by the power-law decay of the orientational correlations, whereas the in-layer bond orientational order in all the hexatic smectic phases observed so far was found to be long range. We report a hexatic smectic phase where the in-layer bond orientational correlations decay algebraically, in quantitative agreement with the hexatic ordering predicted by the theory for two dimensions. The phase was formed in a molecular dynamics simulation of a one-component system of particles interacting via a spherically symmetric potential. The present results thus demonstrate that the theoretically predicted two-dimensional hexatic order can exist in a three-dimensional system.