The ability of artificial intelligence and machine learning techniques in classification and detection of the types of data in large datasets lead to their popularity among scientists and researchers. Because of the presence of different load at different times in power systems, it is hard to provide an accurate mathematical model for such systems. On the other hand, most of the available protection devices in power grids work based on the estimated mathematical models of the grid. For this reason, power system utilizers usually suffer from the low accuracy of the available protection systems in fault detection and diagnosis. In this paper, a reliable machine learning technique is proposed to detect and classify different faults of smart grids. The proposed technique benefits from the principal component analysis (PCA) and linear discriminant analysis (LDA). The PCA is used to reduce the size of the dataset matrixes. The applied PCA reduces the dataset sizes and eliminates the possible singularity of the datasets. The LDA method is applied to the outputs data of the PCA to minimize the within class distance of the dataset and maximize the distance between classes. Finally, the well-known K-nearest neighbor technique is applied to detect the fault and determine its classes. The paper results demonstrate the effectiveness and robustness of the proposed algorithm in the determination of the fault class in smart grids.