Ireland's Peter O'Mahony will lead the side, with his compatriot Sean O'Brien taking the number seven jersey. Warburton will come off the bench.
"It's a reward for how the back row has gone," Gatland said in a statement on Thursday. "There is a nice balance there while Peter captained the side against the Maori All Blacks and has done a good job."
It is the second successive tour that Gatland has shown no sentimentality towards players in order to win the test series.
He dropped Ireland and Lions stalwart Brian O'Driscoll for the deciding third test against Australia in 2013, which prompted an outcry among media, fans, pundits and from the player himself. The Lions won the game 41-16.
Wales utility Liam Williams was surprisingly named at fullback after a strong game against the Waikato Chiefs on Tuesday.
Leigh Halfpenny, who had been impressive against the Maori All Blacks last Saturday has dropped to the bench with Williams offering a more incisive running option and the ability to cover wing.
Gatland has opted for a hard-running midfield combination in Jonathan Davies and Ben Te'o while England's Owen Farrell starts at flyhalf after shaking off an injury.
England duo Elliot Daly and Anthony Watson will start on the wings. Welshman George North is not in the squad.
"We have picked a side based on form with a lot of players putting their hands up, especially from the Crusaders and Maori All Blacks games, and it was a lively selection meeting," Gatland added.
"The win against the Chiefs was also extremely important for the squad and some players played themselves into the side.
"Elliot has been very accurate in the way he has played and we saw some excellent attacking play from Liam.
"We are excited about the 15 that take the field but also the very strong and experienced bench players who will have an impact."
Lions: 15-Liam Williams, 14-Anthony Watson, 13-Jonathan Davies, 12-Ben Te'o, 11-Elliot Daly, 10-Owen Farrell, 9-Conor Murray, 8-Taulupe Faletau, 7-Sean O'Brien, 6-Peter O'Mahony (captain), 5-George Kruis, 4-Alun Wyn Jones, 3-Tadhg Furlong, 2-Jamie George, 1-Maka Vunipola.
Replacements: 16-Ken Owens, 17-Jack McGrath, 18-Kyle Sinckler, 19-Maro Itoje, 20-Sam Warburton, 21-Rhys Webb, 22-Jonathan Sexton, 23-Leigh Halfpenny.
(Reporting by Greg Stutchbury; Editing by Ed Osmond)
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