But Gatland has now ended that speculation by committing himself to a further four years in the Principality.
"I am proud and delighted to have been chosen by the Welsh Rugby Union to take charge of the Wales team until the conclusion of the 2015 Rugby World Cup," said Gatland.
"I have chosen to stay in Wales because of my confidence in the players we have, the coaching structures we have developed and the succession plan of talent we now constantly update, all fully resourced and supported by the WRU.
"I made no secret of the family reasons which have made me consider returning to the southern hemisphere, but it is a measure of how devoted I am to Wales that I want to stay.
"I am looking forward to the challenge and I am extremely proud of the honour I have in taking Wales into the next two Rugby World Cups."
Gatland led Wales to a Grand Slam in his first full season in charge of Wales back in 2008, although Wales have since finished fourth in each of the last two Six Nations.
He currently holds a 50-per-cent win ratio, having picked up 14 victories and 14 defeats in his 28 games to date.
Wales face Australia, South Africa, Fiji and New Zealand in Cardiff next month and, despite recording only one win over the big three during his tenure, Gatland is confident that Wales now have the necessary talent and structures in place to be able to challenge the world's best over the next five years.
"I know the other major rugby nations take us seriously as opponents who can play excellent rugby and that inspires me to help take this group of players even further," added Gatland.
"There is an incredible amount of hard work ahead but, with the continued backing of the Welsh Rugby Union, the national squad now has the means to deliver what the Welsh public want.
"We have a powerful agreement with our Regions, the international player pathway structure is starting to pay dividends and the WRU National Centre of Excellence is a fantastic facility.
"Our best players are now developed within a totally professional structure and the backroom team we have in place boasts some of the best people around in their areas of expertise.
"I want to personally thank the WRU and the Welsh rugby public for the fantastic support the national squad enjoys and I aim to return the compliment by devoting all my professional energy to the success of our national team in the years ahead."
Gatland's contract does have a release clause in it that WRU chief executive Roger Lewis says is mutually beneficial for both the 47-year-old Kiwi and the Union should either party which for a change.
But Lewis is clearly delighted to have persuaded the former Wasps and Ireland boss to pledge his future to Wales, especially as Gatland himself had openly talked about the possibility of returning to New Zealand.
"I am very pleased to be able to announce that Warren Gatland will remain head coach of Wales until after the Rugby World Cup in 2015," said Lewis.
"We have a meticulous and professional coaching and rugby management structure in place which is a great credit to Warren.
"By signing him for a further four years we have ensured that the systems in place will continue to develop for the future of the international game in Wales.
"The process which led to this moment began in earnest more than a year ago and it has taken an incredible amount of hard work and negotiation to make sure we got this right for Wales and for Warren.
"I have great respect for Warren and I know how he lives and breathes rugby and is totally devoted to achieving success for a nation he now calls home.
"He makes a lot of sacrifices to ensure he knows everything there is to know about the talent available to him and the other selectors and we can rest assured that the future of the Welsh team will now remain in safe hands."