Keller, 40, had taken over from Swiss Christian Gross in October, but Stuttgart only managed to reap nine points from nine championship games under his leadership and 2-1 loss to Hanover on Friday left the 2007 German champions one off the bottom in the league.
Keller becomes the third coach to lose his job in the Bundesliga this season after Gross and Zvonimir Soldo (Cologne).
Labbadia, a 44-year-old former German international, now takes over at Stuttgart, having been out of work since his sacking from Hamburg in April.
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