Labbadia, appointed three days before the Wolves face Mainz 05 in a crunch match in the battle to avoid relegation, replaced Martin Schmidt who resigned on Monday five months after stepping in for Andries Jonker.
Labbadia became the fourth coach to occupy the Wolfsburg hot seat since Dieter Hecking was sacked in October 2016.
The 2009 Bundesliga champions are 14th in the table, one point and two places above Mainz who occupy the relegation playoff spot ahead of Friday's match.
"I feel well rested and am looking forward to working with my new team," said Labbadia, who has not coached since he was fired by Hamburg in September 2016.
Labbadia had less time to save Hamburg when he was appointed in April 2015 for a second stint at the club. He guided them to 16th place, the relegation playoff spot, before they overcame second-tier side Karlsruher over two legs.
The former Germany striker, whose playing career took him to several clubs including Hamburg and Bayern Munich, also had three years as coach of VfB Stuttgart and one with Bayer Leverkusen.
"Bruno is a very experienced coach, who has demonstrated his qualities in the Bundesliga on many occasions in the past," said sporting director Olaf Rebbe.
(Writing by Brian Homewood; Editing by Ken Ferris)
