With Adam Ashley-Cooper back to full fitness after coming off the bench in Round Two, he'll once again join Karmichael Hunt in the centres, a combination that delivered for the team in Round One.
The major shift will see a versatile Kurtley Beale move to full-back, with Israel Folau shifting to the wing and Alex Newsome set to come off the replacements bench.
Coming off a bye week, the Waratahs will be looking for their second win of the year against a fierce rival in the Reds, as they prepare for their first game of 2019 at the iconic SCG.
Gibson said his side had plenty to work on after their narrow one-point win over the Sunwolves in Tokyo in Round Two, with his team eager to deliver a strong performance in front of a passionate New South Wales crowd.
"We are facing our oldest rival this week and we want to put out the strongest team we can," he revealed. "The Reds are a very competitive unit, we saw that last weekend and saw that in their first game. We know what we're in for.
"We know how important these derbies are from a conference standing, so there is plenty to play for."
Waratahs: 15 Kurtley Beale, 14 Israel Folau, 13 Adam Ashley-Cooper, 12 Karmichael Hunt, 11 Curtis Rona, 10 Bernard Foley, 9 Jake Gordon, 8 Jack Dempsey, 7 Michael Hooper, 6 Ned Hanigan, 5 Rob Simmons, 4 Jed Holloway, 3 Sekope Kepu, 2 Damien Fitzpatrick, 1 Harry Johnson-Holmes
Replacements: 16 Tatafu Polota-Nau, 17 Rory O'Connor, 18 Chris Talakai, 19 Lachlan Swinton, 20 Will Miller, 21 Mitch Short, 22 Mack Mason, 23 Alex Newsome
Date: Saturday, March 9
Venue: Sydney Cricket Ground
Kick-off: 19:45 local (08:45 GMT)
Referee: Glen Jackson (New Zealand)
Assistant referees: AJ Jacobs (South Africa), Amy Perrett (Australia)
TMO: James Leckie (Australia)