The 28-year-old, who has previously had spells at Saracens and Harlequins, has now put pen to paper just prior to what is expected to be his 104th Premiership appearance when Wasps arrive at Sixways on Friday night.
Worcester Warriors Director of Rugby, John Brain, said: "Matt has been instrumental to what has been achieved at Worcester since 2003 and is now a key member of our squad. I'm delighted that he has committed himself to the club for another three years, it's great news."
Powell added: "I'm delighted to pledge my future to Worcester for another three years. We have top quality coaches at the club and a superb team spirit here which is why it was such an easy decision for me to make."