They have signed right-back James O'Connor from Bournemouth and will sign Gareth Roberts from Tranmere, meaning he would face extra competition for a place at the Yorkshire club.
Rovers boss Dave Penney said: "We have spoken to Dave and his agent throughout the week and he was looking for better terms but also reassurance that he will have a position in the team.
"We see him mainly as a utility player, especially with the signings we have made, so cannot guarantee first team football.
"We have now withdrawn the offer of a contract and thank him for his contribution to the club, plus wish him every success in the future."