The 52-year-old has signed a deal through to summer 2019, and will take charge of first-team training for the first time on Tuesday afternoon.
"Bruno Labbadia is a very experienced coach, who has a proven track record in the Bundesliga," said Wolfsburg sporting director Olaf Rebbe.
Bruno Labbadia is the new head-coach of the Wolves. The 52-year-old has signed on until summer 2019 and will host his first training session today at 16:00 CET. #vflwolfsburg pic.twitter.com/Enot7HCFms— VfL Wolfsburg EN (@VfLWolfsburg_EN) February 20, 2018
Labbadia takes over a Wolfsburg side currently sat just a point above the relegation play-off place after 23 matches. He is well versed in relegation battles, though, having steered Hamburg to safety via the play-offs as recently as May 2015.
"I feel rested and am really looking forward to working with my new team," said Labbadia, who has been out of work since losing his job at Hamburg for a second time in September 2016. His previous clubs include Bayer Leverkusen and Stuttgart.
Wolfsburg travel to current relegation play-off spot incumbents Mainz on Friday night (kick-off: 20:30CET/19:30GMT/14:30ET), in Labbadia's first game as coach.