Gatland, who took charge from Nigel Melville in November 2001, has extended his current contract until June 2006.
Since the New Zealander took charge, Wasps have won the 2002/03 Parker Pen Challenge Cup and the 2002/03 Zurich Premiership Championship and booked a place in this season's Heineken Cup.
London Wasps chairman, Chris Wright said, "Warren has had a tremendous impact on London Wasps since he took over as Director of Rugby. The team's record since then speaks for itself. Warren is clearly in the top echelons of rugby coaches throughout the world and is clearly much sought after.
"I am delighted that we have been able to come to an agreement for Warren to continue with Wasps for a further three years. If we have players away for the World Cup during the first half of the season, 2003/4 will present a tremendous challenge, but we are setting our targets high and will be focusing on making steady progress not just in retaining our Championship title but also in the Heineken Cup."
Gatland said, "I'm really happy that Wasps have extended my contract and I would like to thank the club and players for having faith in me. We are a small, family-orientated club and being a family man, this fits into my life perfectly. When discussions initially took place about the extension on my current contract, I spoke to my wife and two kids and it was a family decision that made me agree to stay on for a furtherthree years.
"We've won the English title and a European competition and so the next goal is the Heineken Cup. I'm also looking forward to this season, as it will provide the club and myself with new challenges, especially if we lose key players to the World Cup.
"All I can say is London Wasps are certainly a club and team to be proud of."