"(Kiel) is no longer part of the program," Kelly said.
The fourth-year Fighting Irish coach met with the media Tuesday in advance of spring football practice, which opens with the first of 14 practice sessions today.
The spring workouts will culminate with the 84th annual Blue-Gold Spring Football Game at 1 p.m April 20 at Notre Dame Stadium.
Kiel decided earlier this offseason to leave Notre Dame, and Kelly talked in brief statements regarding the freshman quarterback and his decision.
"I don't know that I'm surprised," Kelly said. "We had kind of created an opportunity for him to compete in the spring. So maybe a little surprised from that standpoint, because he was actually told that he would be given an opportunity to compete.
"Sometimes when you don't hear that, you know what I mean, you wouldn't be surprised because I'm on the bottom of the depth chart."
The next program that the 2011 Indiana Mr. Football will make a commitment to will be his fourth in the past 18 or so months.
Kiel initially committed to play at Indiana University before his senior season at Columbus East High School. He later reneged on that decision and verbally committed to LSU. However, on the eve of reporting to the Baton Rouge campus, he enrolled in South Bend.
Kiel spent last season running the scout team offense and in January spoke positively of the experience that he had gained. But the play of first-year quarterback Everett Golson through a 12-1 season obviously had a role in Kiel not wanting to compete this spring for a job he felt couldn't be won.
"Clearly kids want to play," Kelly said, "especially at the quarterback position."
Kiel met with Kelly and asked for his release, which the coach processed last Friday. Kelly and Kiel came to an agreement, according to the coach, as to which schools the quarterback would be allowed to transfer to.
"I don't think it was a restriction, as much as we had an open conversation about the schools," Kelly said. "I think the schools that he was looking at were in line with the schools that I thought were appropriate relative to who was on our schedule."
Earlier this month, there had been reports that Kiel would consider Midwestern programs that included Ball State, Northern Illinois, Cincinnati and Miami (Ohio). There has been talk on message boards that former Cincinnati coach Butch Jones, now the head coach at Tennessee (and a former assistant to Kelly at Central Michigan), would be very interested in Kiel playing in Knoxville.
However, Kelly wasn't saying which program the heralded quarterback would be going to next.
"There were a number of nationally regarded programs across the board," Kelly said. "There were too many for me to even get into. Some regionally, some national, but a pretty long list.
"We gave him pretty good leeway to find the right resting place."
Despite having Golson (three years of eligibility left), Kiel (four years), and seniors Tommy Rees and Andrew Hendrix on the roster at quarterback, Kelly brought in yet another highly touted player at the position this past January in Malik Zaire.
The coach was asked if bringing in so many players to compete at a specific position that generally employs just one, or maybe a second player in certain packages, is a wise strategy in constructing a roster.
"Well, it's not something that I've actually thought about," Kelly said. "At first glance you would think that five might be heavy in terms of scholarship quarterbacks.
"I think it's something that we have internal conversations about relative to what the right mix there is. But for me to be definitive, I think it depends on what year those quarterbacks are. You got a couple of seniors; you might be able to get away with five.
"I think really when you're recruiting, what are you looking for when you're recruiting at that position? In other words, there could be some dual threat guys (like Golson, Hendrix and Zaire) there.
"I don't want to put myself at `Hey, I'm never going to get to five.' But that's a lot of quarterbacks. I think circumstances in terms of class, where they are in the class, whether they're a guy that can maybe play multiple positions, have a lot to say in that as well. "