Asked whether Kilkenny would be concentrating on football only at senior level, Gavin responded: "At the moment, yeah," adding that he would, however, play with Shay Boland's under-21 hurlers.
Speaking to the Herald last week on the day of Kilkenny's announcement, Daly reiterated his desire to see the prodigious youngster attempt to play both codes and suggested a compromise could be reached between the respective management teams.
"I heard the word compromise being used and it's not a case of compromising," Gavin said.
"It's a case of players making their priorities and his priority at the moment he said is football.
"He is keen to play some under-21 hurling as well and I have no issue with that.
"I don't dictate to players what they should do, who they should play with and what sport they should play.
"Be it Gaelic football, hurling or whatever else. I set out my vision for them and, to achieve those goals that I have, there are certain things that need to be done.
"So it's not a case of compromise, it's a case of priorities and his priority at this time at the moment is football."
The news will come as a further blow to Anthony Daly who had hoped Kilkenny's Aussie U-turn would see him play at least some hurling for Dublin this year.
Already, he has lost Tomás Brady and trainer Martin Kennedy to the footballers while dual prospects Cormac Costello and Eric Lowndes have both chosen Gavin's panel over Daly's since graduating from minor level.
Kilkenny, however, will not play any part with Dublin until at least the beginning of the league.
Gavin revealed he was likely to train with his panel this week but would not play in the O'Byrne Cup owing to his club commitments with Castleknock, who play Kerry's Kenmare in an All-Ireland club JFC semi-final on January 27.
Gavin conceded that his return was a boost for his panel but warned his return didn't automatically guarantee game time.
"No more than any player, he needs to get back into the system. We're picking players on performances and he needs to get the opportunity to put those performances in. He knows as well there's no guarantees in sport.
"Ciarán is a very mature man for such a young guy and he comes from a very strong, stable background, a very humble guy and knows what he wants which was reflected in his decision to come all the way back from Australia, which is probably an indication of, I suppose, how he has his life under control."
Kilkenny's pending addition strengthens Gavin's attacking options and the manager explained that due to Ballymun Kickhams' presence in the All-Ireland club SFC semi-final, his squad would remain in a state of flux until after their participation was concluded.
Kevin Nolan will return to playing for the league and both Michael Darragh Macauley and Cian O'Sullivan should also be fit by the time Cork come to Croke Park to begin the Spring Series on Saturday, February 2.
Gavin explained he will carry just two goalkeepers into the league after Vinny Whelan became the third player to wear the number one jersey yesterday.
The St Maur's 'keeper is up against Shane Supple for a spot alongside Stephen Cluxton in Gavin's spring plans.