Van Gerwen claimed a 5-2 triumph after a match which was briefly interrupted when his opponent sustained an unusual finger injury early in the third set of the match.
Labanauskas, who had taken the opener to threaten a surprise, drew blood after accidentally stabbing himself with a dart, but showed no ill effects after the brief interruption.
Van Gerwen looked set to pull away from his opponent when he took the next two sets to go 3-1 in front, but gutsy Labanauskas pulled one back to haul himself back the match.
In a high-quality battle in which both men hit six perfect darts at the start of a leg to hint at an elusive nine-darter, Van Gerwen finally showed his class to pull away again and take his place in the last four.
Peter Wright shrugged off a recent bout of illness to defeat Luke Humphries 5-3 and keep his own hopes of a first world title alive.
Former runner-up Wright produced a spectacular start, averaging just under 106 and hitting a maximum 170 check-out as he charged into a 4-1 lead.
Humphries recovered well to reduce the deficit then whitewash Wright in the seventh set before the 2014 runner-up settled his nerves by closing out the match.
Wright said: "I wanted to go out and stay on top of him and I did that.
"I played well but I need to be much more consistent to go all the way but I feel really good and when I feel this good I can win anything."
Nathan Aspinall returned to the semi-finals for the second successive year with a 5-3 win over Dimitri Van Den Bergh.
Aspinall also established a 4-1 lead before beginning to waver, and he admitted afterwards: "I don't know why I felt so nervous. It is something I need to address. The occasion got to me and I didn't play very well so I'm happy to get through."
Third-seeded Welshman Gerwyn Price completed the semi-final line-up after cruising to a 5-1 win over BDO champion Glen Durrant.
Price credited a much improved performance from his tempestuous quarter-final win over Simon Whitlock, after which he had blasted his opponent for his perceived slow play.
Price told Sky Sports: "I hung in there and took the doubles when I needed to. I'm happy but 5-1 is probably a bit flattering."
Price, who averaged just shy of three figures, will next face Wright, and had a message for his last four opponent who had predicted beforehand that Durrant would emerge victorious.
"Peter thought I was going to lose 5-2, and now I'm going to smash him 6-0," laughed Price. "Me and Peter get on brilliantly [but] I think he was trying to get into my head."