The twice-weekly service will operate on Mondays and Fridays.
The UK has a travel corridor with Gibraltar, meaning there is no 14-day self-isolation requirement for those returning to the UK.
This week, Wizz will launch twice-weekly Luton-Madeira flights, operating on Tuesdays and Saturdays, to offer another viable winter sun option.
Owain Jones, Wizz Air UK managing director, said Wizz’s "affordable flights" would open up the Mediterranean peninsula.
One-way fares start from £25.99pp (hand baggage only).
The launch sees Wizz go up against British Airways and easyJet routes to Gibraltar, with stiff competition on prices in the new year.
Wizz fares drop to as low as £13.99pp on 25 January, while easyJet’s Luton-Gibraltar flight the same day is currently priced at £26.99pp.
BA’s Heathrow-Gibraltar fares start from £37pp in January.
