It's still early, but he plans to have it playable at E3 2004.
Computer & Videogames, a European gaming site, interviewed Zelda director Eiji Aonuma at last week's E3 Expo in Los Angeles. In the interview, Aonuma confirms that he is already working on a follow-up to The Wind Waker, much like Majora's Mask was a follow-up to Ocarina of Time.
Aonuma: I am unable to give you any details right now. I am hoping to have a playable version ready by next year's E3, so I'm hoping you'll be patient and look forward to that.
As I did between Ocarina of Time and Majora's Mask, I will use the same engine and the same graphics of Wind Waker for its sequel. However, I do plan on powering everything up a bit.
Be sure to visit C&VG with the link above to read the rest of the interview.