The Pirates optioned Kelly to Triple-A Indianapolis on Monday.
Kelly was one of eight players dismissed from big-league camp in the Pirates' latest round of roster cuts. The Pirates added the 22-year-old right-hander to the 40-man roster in the offseason after he turned in a 3.02 ERA, 1.06 WHIP and 116:33 K:BB over 107.1 innings between stops at High-A Greensboro and Double-A Altoona last season.