Labuschagne's form recently saw him earn a call-up to the Australian Ashes squad and he made history at Lord's by becoming the first-ever concussion substitute in Test match cricket.
He reeled off four successive half-centuries in the series and finished as one of the standout players on both sides. Despite only completing seven innings, he was Australia's second-highest run-scorer with 353 runs at an average above 50.
“I'm absolutely rapt to re-sign for Glamorgan and come back to Cardiff for another two years,” said Labuschagne in an official statement.
“My batting improved a lot last year under his guidance and I'm excited to work him again. But I'm equally excited to do everything I can to help drive the team into Division One. We definitely have the playing talent and coaching staff to get us there,” he added.
Glamorgan coach Matthew Maynard was delighted to have Labuschagne on board, referring to him as a "proper cricket badger."
“It's brilliant, he brought a huge amount of energy to the team last year,” said Maynard. “He had a huge amount of skill with the bat, with his leg-spin and in the field, as well as his character. He reminded me very much of Viv Richards in terms of his drive, his passion and being a real leader on the field.”
The 25-year-old signed as the Welsh county's overseas player for the first half of the 2019 season. Earlier, he became the first player in domestic cricket to reach 1,000 County Championship runs. He racked up 1,114 runs in the County Championship in just 18 innings at an average above 65 and took 19 wickets with his leg-spin.