Diamond wire saws are widely used in machining of high strength reinforced concrete and steel structures. In such operation conditions, the tools wear down rather quickly, which has significant technical and economic implications. Currently, there are three main ways to improve a quality of diamond cutting tools: increasing (1) strength of a binder (metal matrix), (2) diamond grain grade and (3) adhesion strength between diamond and a binder. In this work, an effective approach involving simultaneous improvement of (1) and (3) during diamond composite material sintering is reported. The mechanism of spontaneous formation of WC layer on a diamond surface during sintering with metal matrix composite in the presence of WC nanopowder as a reinforcing additive is studied. The layer is formed via gas-phase transport mechanism leading to chemisorption of volatile tungsten oxide WO3 onto a diamond surface followed by WO3 reduction and carbide formation. The simultaneous enhancement of mechanical properties of the binder and formation of protective WC interfacial layer on diamonds provide a synergistic effect, which results in increased productivity and cutting speed of diamond tools.