Kerr has stated publicly he wants to sign a long-term deal with the Eagles, but Nisbett said such a deal was out of the question.
However, the Eagles chief was confident the club would secure Kerr, who is contracted until the end of next season, on a three-year deal at some point in 2009.
Nisbett said it would take “the deal of a lifetime” to convince West Coast to trade Kerr, with picks one and three in the 2008 national draft a minimum return.
"We won't be negotiating a four or five-year contract," Nisbett said on Monday.
"We're not into long-term contracts of that ilk. We'd be looking at probably a three-year contract with Daniel at some stage next year.
"That's the way we view it these days with contracts. It's very difficult to pay players over a five-year term.
"I think there are other players in the competition who have asked for the same, and I think their clubs are having trouble coming to terms with it.
"It is a difficult thing to predict what's going to happen three years out, let alone five years."
Nisbett said Kerr had indicated to the club as recently as last week that he intends to stay in the West, contrary to newspaper reports.
However, a sticking point in negotiations has been the length of the contract, something West Coast now appears unwilling to bend on.
"Kerry's a contracted player, and we don't expect anything to come out of most of the newspaper talk that's been talking about him leaving and so on," Nisbett said.
"We're not in a position to trade one of our best players unless something remarkable happened.
"And that could only be if somebody came back to us and said 'this is the deal of a lifetime' and that we'd have to accept. I'm a realist, and that's not going to happen.
"Realistically, the clubs with picks one and three, if they're not prepared to give them up to a club who wants him, I don't think any deal could possibly get done."
Nisbett said the club was no closer to agreeing to terms with utility Brent Staker, while contracted ruckman Mark Seaby was likely to be retained for next season.
