But the full-back could be called up as injury cover if required and provided he proves his fitness.
The 27-year-old has not played since September and was omitted from Gatland's 35-man tour squad.
"We've spoken to Leigh and we've picked a standby list and he's part of that," said Gatland.
"He understands he does need some games and he's happy to be on a standby list."
Wales face England at Twickenham on 29 May before travelling to play three Tests against the World champions and a midweek game against Waikato Chiefs.
Halfpenny had surgery on a knee after suffering an injury playing for Wales against Italy on 5 September.
His return has been delayed, though Gatland said he was expected to be back in action for Toulon soon.
"He hasn't been involved in rugby since September and his return to play isn't too far away, he's started some running now," Gatland said.
"Maybe there's a possibility he'll get a few games for Toulon and maybe the potential to call him in later in the tour if there are injuries and he does get some form back."
Gatland said he had no discussion with Toulon over releasing Halfpenny after the French club's owner Mourad Boudjellal said the player would not be paid by the club if he toured with Wales.
"We cross that bridge when we come to it," added Gatland.
"At the moment there isn't any issue because Leigh isn't in the squad.
"One of the great things about Leigh is his priority is to play for Wales.
"We're conscious of making sure that relationship between the clubs and us will stay as positive as it can be because you don't want players in the middle of rows between countries and clubs because there's only one loser in that and that's the players."
Racing 92 lock Luke Charteris and Clermont Auvergne centre Jonathan Davies are also likely to be involved in French domestic play-offs, but have been named in Wales' tour squad.
The French Top 14 final will be played on 24 June, the eve of Wales' third and final Test against the All Blacks in Dunedin.
Wales have first call on the players during an World Rugby-sanctioned international window, and Gatland said the fact both players were leaving France at the end of the season "put a different slant" on the situation.
Toulon's Leigh Halfpenny was not considered for Wales' summer tour of New Zealand, according to coach Warren Gatland.