A state feedback controller with integration of output error is proposed for way-point tracking of an AUV (Autonomous Underwater Vehicle). For the steering control on the XY plane, the proposed controller uses three state variables (sway velocity, yaw rate, heading angle) and the integral of the steering error, and for the depth control on the XZ plane, it uses four state variables (pitch rate, depth, pitch angle) and the integral of the depth error. From the simulation using Matlab/Simulink, we verify that the performance of the proposed controller is satisfactory within an error range of 1m from the target way-point for arbitrarily chosen sets of consecutive way-points.