The France-born forward represented the Les Bleus all the way up to Under-21 level but has accepted a call-up for Alou Diarra's Olympics squad after qualifying through his parents.
And the 22-year-old revealed his delight at representing the African nation and admitted his future international prospects took precedent when making his decision.
"I'm very happy to play at the Olympics with Senegal," Gueye told Everton's official website. "I'm very, very proud.
“The coach, [former Portsmouth and Birmingham midfielder] Aliou Cisse, contacted me about three weeks ago and we had a long discussion along with my family.
"It was a very tough decision because I played for France and France is a very big federation, a very big team. But I think it's good for me to try Senegal because I've got more opportunities to play.
"If I chose Senegal, it's because I've got a big project with them. I spoke with the manager, the director of the federation and they are happy I've joined them.
"I hope to go to the World Cup and the African Cup of Nations as well. We've got good opportunities because we've got a good team."
Senegal will kick off their Olympic campaign by facing hosts Great Britain on July 26 and Gueye is looking forward to getting started.
"It will be more special because it's in London," he added. "Everybody will watch the Olympics, it's an occasion to show my football, to show that Senegal can be a great team and it will be very special for me."It would mean a lot to pick up a medal. It's my first competition and my first with Senegal so it means a lot to me.