"I'm happy to bat anywhere, wherever I'm needed or most valuable for the team. It doesn't really matter what time I come outto bat," Labuschagne told AAP. "I haven't actually played with Steve yet, so I'm excited about that. Very happy to have someone of his calibre coming back."
Selectors have also continued to rotate the fast bowlers, dropping James Pattinson for Mitchell Starc.
Peter Siddle is also in the squad but it's expected Starc will play his first match in the series as Pattinson continues to go one-on, one-off.
Australia have carefully managed the workload of their fast bowlers on this tour, especially Pattinson given it is the express paceman's long-awaited international comeback after three and a half years of injury hell.
There is a three-day break between the fourth and fifth Tests, all but ensuring the attack will be changed yet again for the series finale.
Marcus Harris and Matthew Wade had been the other batsmen under the pump. But selectors want to give Harris, recalled for the third Test after Cameron Bancroft was dumped, a chance to show his opening partnership with David Warner has a future.
Wade, having scored a century in Australia's series-opening victory, was retained after modest returns with the bat at both Lord's and Headingley.
Australia's 12-man squad: Marcus Harris, David Warner, Marnus Labuschagne, Steve Smith, Travis Head, Matthew Wade, Tim Paine, Pat Cummins, Mitchell Starc, Nathan Lyon, Josh Hazlewood, Peter Siddle.
AUSTRALIA REACTS TO CHANGES
Ex-Test player Dean Jones described the decision to drop Khawaja as "the easiest and most logical".
Former Aussie skipper Mark Taylor had also predicted the change this week. "Khawaja makes way for me. He's unfortunately out of form," Taylor told Nine. "Unfortunately, he's not making runs. That's what you've got to do at No. 3."
But former Cricinfo editor Rick Eyre said: "I would have stuck with Khawaja but I'm not on Justin Langer's radio frequency or even his bandwidth ... Khawaja is an imperfect player in an imperfect team. Should Warner's spot in the batting be any safer?"
Taylor had also flagged Starc's inclusion. "I don't think it's time to panic, but it is time for someone like Mitchell Starc to be given a go. I think he is ready to go, so I would roll the dice with him and play him in the fourth Test match," he said. "I'd probably throw Starc in ahead of Siddle. I'd take a bit of a punt there."
ENGLAND SHUFFLES ITS ORDER
Joe Denly has confirmed he will open for England in the fourth Ashes Test match at Old Trafford with Jason Roy dropping down to number four.
"I got a call from (captain) Joe Root after a bit of time off and he said he'd like me to go at the top of the order and try to get us off to a good start," he is reported to have said by PA Media.
"Obviously Jason (Roy) is going to bat four and that's great for English cricket. With Jason Roy in the team we are a better team and with him coming in at four, hopefully with the new ball worn off and myself and Rory Burns doing our job at the top, it allows him to come in and play his way. He's a great player to have there."
Denly batted at two in his first Test match for Joe Root's side against the West Indies in Antigua, managing scores of six and 17.
The 33-year-old all-rounder moved down to first drop in his second red-ball match in St Lucia, hitting his maiden Test half-century in the second innings to help set up a resounding victory.
He also batted at number three in the first innings against Ireland at Lord's in July before Root opted to move up a spot in the batting line-up at the beginning of the Ashes pushing the Kent batsman to No. 4.
He shared an important 126-run third-wicket partnership with Root in the final innings of the third Test at Headingley, making a hard-fought fifty off 155 balls to help stabilise England's record chase.
Meanwhile, Roy has struggled against the new ball during the series against Australia, in which he has scored just 57 runs in six innings with a high score of 28, having been brought in for the series following his opening heroics in white-ball cricket.
