Transient response of a simply supported functionally graded material (FGM) cylindrical panel integrated with sensor and actuator piezoelectric layers and subjected to electric field and thermal shock is investigated using generalized coupled thermoelasticity based on the Lord-Shulman theory. Thermoelastic material properties of the FGM are assumed to vary continuously along the radial direction according to simple power law with assumption of constant Poisson ratio. Applying Fourier series expansion along the axial and circumferential direction and state space technique along the radial coordinate to the constitutive equation and governing differential equation of motion result in state space matrix equations which are solved analytically by using Laplace transform. The inverse Laplace transform is used to obtain the solution in time domain. In parametric study effect of relaxation temperature constant, applied voltage and thermal shock on thermoelastic response of FGM cylindrical panel attached to piezoelectric sensor and actuator layers are studied. From parametric study it was concluded that the material inhomogeneity significantly affect coupled thermoelastic behavior of the hybrid FGM cylindrical panel.