Congress had decided to field Gavit as the party candidate, but reversed the decision this afternoon.
Party sources said that former MP and district Congress president Damu Shingada pressed for reversal of the decision to field a candidate.
Maharashtra Congress spokesperson Sachin Sawant said the decision was taken to avoid a triangular fight which would have benefited the communal forces.
Industries Minister Narayan Rane justified the decision, saying it was "an internal matter" of Congress, and "party workers were taken into confidence before withdrawing our candidate".