Labuan (ləbōˈən, läˌbōänˈ) [key], island (1991 pop. 54,307), 38 sq mi (98 sq km), a federal territory of Malaysia, off Sabah, N Borneo, in the South China Sea. Coconuts, rubber, and rice are the main products. Victoria, the chief town, has a fine harbor and an airport and is the shipping center for much of N Borneo. Labuan was ceded to Great Britain by the sultan of Brunei in 1846 and became a crown colony in 1848. It was included in the Straits Settlements in 1906 and in 1946 was joined to British North Borneo, which became Sabah in 1963. It was at Labuan that the Japanese surrendered to Australia in 1945.