diff --git a/lib/ansible/module_utils/kubevirt.py b/lib/ansible/module_utils/kubevirt.py
index acf2fdb228..e445554e53 100644
--- a/lib/ansible/module_utils/kubevirt.py
+++ b/lib/ansible/module_utils/kubevirt.py
@@ -342,7 +342,7 @@ class KubeVirtRawModule(KubernetesRawModule):
             template_spec['domain']['cpu']['model'] = cpu_model
 
         if labels:
-            template['metadata']['labels'] = labels
+            self.merge_dicts(template['metadata']['labels'], labels)
 
         if machine_type:
             template_spec['domain']['machine']['type'] = machine_type
diff --git a/lib/ansible/modules/cloud/kubevirt/kubevirt_vm.py b/lib/ansible/modules/cloud/kubevirt/kubevirt_vm.py
index 1f9920cd18..3c6a76b0af 100644
--- a/lib/ansible/modules/cloud/kubevirt/kubevirt_vm.py
+++ b/lib/ansible/modules/cloud/kubevirt/kubevirt_vm.py
@@ -346,7 +346,7 @@ class KubeVirtVM(KubeVirtRawModule):
 
         template = definition if ephemeral else definition['spec']['template']
         kind = 'VirtualMachineInstance' if ephemeral else 'VirtualMachine'
-        template['labels']['vm.cnv.io/name'] = self.params.get('name')
+        template['metadata']['labels']['vm.cnv.io/name'] = self.params.get('name')
         dummy, definition = self.construct_vm_definition(kind, definition, template)
         definition = dict(self.merge_dicts(processedtemplate, definition))