How can I update our DNS server to point the url 'devlabs.ourdomain.com' to the new VM?
It depends on what DNS server you are using, which you do not specify. On BIND the sequence of events would usually be something like: identify the master name server for the zone. on the master, make a change to the zone master file to change the contents. instruct BIND to reload the zone using "rndc reload myzone.example.org" if you have rndc set up (better), otherwise stop and restart the name server (undesirable.) allow time for propagation of the new zone information to any secondary authoritative servers, which (if properly configured) should receive notifies from the master server to update their information via zone transfer. The sequence is slightly simpler if you are using dynamic updates.
However, keep in mind that even after you have made the change there may be clients out there trying to use the old address for a while. DNS Resource Records all have an associated TTL ("time to live") value which specifies how long they are allowed to be cached by another server. Servers which properly honor this value (alas, not all of them do) should be reliably answering queries with the new value by time (Time of change on last authoritative server) + (TTL in seconds) but until that time other servers that have cached an answer are legitimately allowed to give a client the old value in answer to a query.
Common strategies for mitigating this problem are to reduce the TTL value of Resource Records prior to a change or to operate on both servers until the TTL expires and DNS settles on the new address.