England forwards coach Steve Borthwick, interim Wales head coach Rob Howley (attack) and Ireland defence coach Andy Farrell have already been confirmed as assistants to Gatland for the three-Test tour next June and July.
The BBC reported O'Halloran was tempted by the possibility of a role with the Lions, but felt his Glasgow commitments made it an impossibility.
Instead he will concentrate on working under Rennie, Townsend's successor at the Warriors.
Depending on the progress of the Chiefs, Rennie could be tied up in New Zealand until 5 August when the Super Rugby final is played.
Gatland had spoken about the importance of having a Scottish coach on his staff for the tour to New Zelaand, hinting that a lack of Scottish representation could negatively impact their players' chances of making his squad to take on the All Blacks.
"The ideal scenario from my point of view would be having someone from Scotland to give some representation, to push the Scottish cause, to push some of their players," he told BBC Wales.
"That's important. Someone from within the Scottish system will know their players a lot better than we do, they'll know the characters and the individuals and potentially push them on a 50/50 decision.
"My ideal scenario would be to have someone from Scotland. If that happens, that would be great."