iOS 4.0 gold master candidate is available for download to the developers and the race to jailbreak iOS 4.0 GM build is already started. We have already reported that Redsn0w 0.9.5 can jailbreak iOS 4.0 on iPhone 3G however you need to be on official carrier since on updating to iOS 4.0 your baseband will also be updated to 05.13.04 for which no official unlock tool is available yet (unofficial tool Blacksn0w).
The only way to unlock iOS 4.0 on iPhone 3G/3GS is to preserver baseband with the help of unofficial Pwnagetool 4.0 or the updated Pwnagetool bundles released by msft.guy for iOS 4.0 GM build. Though the process is not full proof and if you don’t know what you are doing then better wait for iPhone Dev Team’s official tools.
Those brave souls, who want to still go ahead, here is step by step guide (Thanks to FSMdotCOM for guide) to Jailbreak iOS 4.0 on iPhone using Pwnagetool bundles.
In brief the process is to make Pwnagetool 3.1.5 compatible with iOS 4.0, the two things which we are missing in Pwnagetool 3.1.5, one is iOS 4.0 GM firmware bundle and second is Cydia installer compatible with iOS 4.0.
Things you need :
Jailbreak Bundle for iPhone 3GS 4.0 (iPhone2,1_4.0_8A293_bundle.zip)
Redsn0w 0.9.5 Beta 4 (needed to extract cydia app and replace with one present in Pwnagetool 3.1.5)
iTunes 9.2 (only available for Mac)
How to Jailbreak iOS 4.0 on iPhone 3GS
1. Download iPhone 3GS 4.0 Bundle and all the tools and place it on Desktop.
2. Now right click Pwnagetool.app (Pwnagetool 3.1.5 for Mac OS X) and click on ‘Show Package Contents’.

3. Now browse to Contents>Resources>Firmware Bundles>
4. Now copy the custom bundle iPhone2,1_4.0_8A293_bundle.bundle from iPhone2,1_4.0_8A2943_bundle.zip to FirmwareBundles of Pwnagetool.app

5. Right click on redsn0w.app and ‘Show Package Contents’ and browse to Contents>MacOS> . Copy Cydia.tar.gz on your desktop and extract its content.

6. Now you will need to copy Cydia into PwnageTool.app. To do that, right click on Pwnagetool.app and ‘Show Package Contents’. Browse to : Contents>Resources>CustomPackages> right click on ‘CydiaInstaller.bundle’ and ‘Show Package Contents’ > Files> and overwrite all the files with the ones you just extracted from redsn0w.

7. That’s it. Now load PwnageTool.app and create iOS 4.0 custom firmware for iPhone 3GS
8. Once you got the custom .ipsw, you need to restore iOS 4.0 via iTunes. Your iPhone device must be jailbroken. Put the device in recovery mode and restore.
That’s it, if you have followed above steps properly you will have jailbroken iPhone 3GS 4.0. Now you can run Blacksn0w to unlock iPhone 3GS 4.0.
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