A new nonlinear finite element model is proposed for the dynamic analysis of cylindrical sandwich panels with shape memory alloy hybrid composite face sheets and flexible core. In order to present a realistic transient vibration analysis, all the material complexities arising from the instantaneous and spatial martensite phase transformation of the shape memory alloy wires are taken into consideration. The one-dimensional constitutive equation proposed by Boyd and Lagoudas is used for modeling the pseudoelastic behavior of the shape memory alloy wires. Since the martensite volume fraction at each point depends on the stress at that point, the phase transformation kinetic equations and the governing equations are coupled together. Therefore, at each time step, an iterative method should be used to solve the highly nonlinear equations. Moreover, considering that the stress resultants generated by the martensite phase transformation in the wires are path-dependent values, an incremental method is used to estimate the increment of the stress resultants at each time step. The governing equations are derived based on the energy method and Newmark time integration method is used to solve the discretized finite element equations. Finally, several numerical examples are presented to examine the effect of various parameters such as intensity of applied pressure load, operating temperature, location of shape memory alloy wires, volume fraction of the shape memory alloy wires, and also boundary conditions upon the loss factor for panels with different aspect ratios.