In the longest format of the game, Smith and Kohli have been fiercely competing to hog the pole position as the world's best Test batsman for the past 4-5 odd seasons. Labuschagne picked Smith over Kohli for his ability to score runs consistently in different conditions.
"I think Steve (Smith) in Test cricket has just shown in any condition, he can find away. I think that's what you know really makes him the best, number one Test player in the world," Labuschagne was quoted as saying by India Today.
"He has found a way in India, he has found a way to score in England, he is obviously very consistent in Australia, so it seems that it doesn't matter where are you playing and in what conditions, he is finding a way. Now, Virat has probably done a similar thing. I will probably go with Steve in Test cricket.'
"Virat's white-ball cricket is phenomenal. The way he finishes innings, the way he finishes matches off, the way he chases. I think for me personally, I have learned a lot from him," he added.
Labuschagne is part of Australia's 26-member preliminary squad for their proposed limited-overs series against England. The final squad will be picked after the tour is confirmed by both the boards.
Australia's proposed limited-overs series in England, which will consist of three T20Is and as many ODIs, will begin on September 4.