A system and method for connecting virtual computer networks in a public cloud computing environment using a transit virtual computer network uses a cloud gateway device in the transit virtual computer network that includes a first-tier logical router and a plurality of second-tier logical routers connected to the virtual computer networks. A source Internet Protocol (IP) address of outgoing data packets from a particular virtual computer network is translated at a particular second-tier logical router of the cloud gateway device from an IP address of the particular virtual computer network to an internal IP address from a particular pool of IP addresses. The outgoing data packets are then routed to the first-tier logical router of the cloud gateway device, where the outgoing data packets are transmitted a destination network from a particular interface of the first-tier logical router of the cloud gateway device.