The 21-year-old actor - who played Eric van der Woodsen - currently stars in ABC drama Revenge.
"It's quite impossible for me to do [Gossip Girl] being on the West Coast and doing Revenge, even just down to legalities," he told The Hollywood Reporter.
"You're contracted to one network, it's not easy to show up on another network. So it was never about me not wanting to be there and more about me not being able to be there."
Paolo added that he is open to "discussion" but revealed that he is not desperate to reprise the role of Eric.
"[It's] much more dependent on the writers of Gossip Girl calling me and going, 'We've gotta get you back, man'.
"Then it's a discussion. But am I calling them incessantly and going, 'I need to be back on for this finale'? No."
Paolo last appeared in the show's fourth season finale, 'The Wrong Goodbye', which aired in May 2011 in the US.
Gossip Girl continues on Mondays at 8/7c on The CW and airs on ITV2 in the UK.