diff --git a/compiler/rustc_resolve/src/late.rs b/compiler/rustc_resolve/src/late.rs
index df620ddb66529..b689765bf6fa1 100644
--- a/compiler/rustc_resolve/src/late.rs
+++ b/compiler/rustc_resolve/src/late.rs
@@ -3689,7 +3689,11 @@ impl<'a, 'ast, 'ra, 'tcx> LateResolutionVisitor<'a, 'ast, 'ra, 'tcx> {
             let ident = Ident::new(kw::SelfLower, span.normalize_to_macro_rules());
             let res = Res::Local(delegation.id);
             this.innermost_rib_bindings(ValueNS).insert(ident, res);
-            this.visit_block(body);
+
+            //As we lower target_expr_template body to a body of a function we need a label rib (#148889)
+            this.with_label_rib(RibKind::FnOrCoroutine, |this| {
+                this.visit_block(body);
+            });
         });
     }
 
diff --git a/tests/ui/delegation/unreachable-label-ice-148889.rs b/tests/ui/delegation/unreachable-label-ice-148889.rs
new file mode 100644
index 0000000000000..e5f9fa1cf4934
--- /dev/null
+++ b/tests/ui/delegation/unreachable-label-ice-148889.rs
@@ -0,0 +1,18 @@
+#![allow(incomplete_features)]
+#![feature(fn_delegation)]
+
+trait Trait {
+    fn static_method2(x: i32, y: i32) -> i32 {
+        x + y
+    }
+}
+
+struct S;
+impl Trait for S {}
+
+pub fn main() {
+    'foo: loop {
+        reuse <S as Trait>::static_method2 { loop { break 'foo; } }
+        //~^ ERROR use of unreachable label `'foo`
+    }
+}
diff --git a/tests/ui/delegation/unreachable-label-ice-148889.stderr b/tests/ui/delegation/unreachable-label-ice-148889.stderr
new file mode 100644
index 0000000000000..2141962609183
--- /dev/null
+++ b/tests/ui/delegation/unreachable-label-ice-148889.stderr
@@ -0,0 +1,13 @@
+error[E0767]: use of unreachable label `'foo`
+  --> $DIR/unreachable-label-ice-148889.rs:15:59
+   |
+LL |     'foo: loop {
+   |     ---- unreachable label defined here
+LL |         reuse <S as Trait>::static_method2 { loop { break 'foo; } }
+   |                                                           ^^^^ unreachable label `'foo`
+   |
+   = note: labels are unreachable through functions, closures, async blocks and modules
+
+error: aborting due to 1 previous error
+
+For more information about this error, try `rustc --explain E0767`.