Sydney: Australia have dropped top-order batter Marnus Labuschagne from their squad for the upcoming four-Test series against New Zealand following a extended slump in form.

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The 32-year-old, who has featured in 68 Tests and previously held the rank of world's top Test batter, entered the recent tour of South Africa under intense scrutiny. However, he struggled to produce results, managing a top score of just 39 across three Tests. He has been without a Test century since the 2023 Ashes series against England.

Addressing the selection decision, chairman of selectors George Bailey clarified that the door remains open for a future return depending on domestic performance.

"At this stage we won't be considering Marn for selection for certainly that first Test, but for the New Zealand series," chairman of selectors George Bailey told cricket.com.au.

"There's been a lot of speculation around his place in the team.

"So I think this gives him a little bit of space and clears up a bit of conjecture as we work through the next round of (Sheffield) Shield cricket."

Despite the omission, Bailey indicated that Labuschagne could earn a spot back through red-ball runs in the Sheffield Shield.

"It's still possible, absolutely," he said.

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"And I think we all know how good and how effective Marnus can be at his best. But that performance hasn't been there.

"But I don't think we've ever ruled anyone out permanently ... and that's no different in this case."

The opening Test against New Zealand is scheduled to start on December 9 in Perth. The official squad will be announced following the next round of Shield fixtures, starting Wednesday.

With Labuschagne out, Steve Smith is expected to move up to the number three position. (AFP)