Sacked former rugby international Israel Folau has launched legal proceedings with the Fair Work Commission against Rugby Australia (RA) and NSW Rugby for breach of contract.

Key points: Israel Folau's lawyers said it was unlawful of Rugby Australia to terminate employment on the basis of religion

Israel Folau's lawyers said it was unlawful of Rugby Australia to terminate employment on the basis of religion Folau is seeking "substantial remedies from his former employers"

Folau is seeking "substantial remedies from his former employers" His brother John has been granted a release from his New South Wales Waratahs contract

Folau's lawyers said under Section 772 of the Fair Work Act, it was unlawful to terminate employment on the basis of religion.

In a statement, Folau said: "I will forever be grateful and proud to have played the sport I love for our nation.

"Ours is an amazing country built on important principles, including freedom of religion.

"A nation made up of so many different faiths and cultural backgrounds will never be truly rich unless this freedom applies to all of us.

"No Australian of any faith should be fired for practising their religion."

Folau's contract was ripped up last month by an independent panel for a high-level breach of the Professional Players' Code of Conduct over his anti-gay social media posts.

Folau, a staunch Christian, posted on Instagram in April that homosexuals, among others, would go to hell unless they repented.

The 30-year-old recently appointed a legal team comprised of high-profile employment lawyers, including barrister George Haros and barrister Stuart Wood AM QC.

A statement from his lawyers said Folau was seeking "substantial remedies from his former employers should they be found to have breached the Fair Work Act in terminating his employment".

Israel Folau is the equal third-highest try scorer in Wallabies history. ( Reuters: Toby Melville )

RA and NSW Rugby released a statement confirming they would maintain their ground following Folau's decision to launch legal action.

The organisations stated they "did not choose" to be in this position but they were committed to upholding the values of "inclusion, passion, integrity, discipline, respect and teamwork".

"We will defend those values and the right for all people to feel safe and welcome in our game regardless of their gender, race, background, religion or sexuality," the statement said.

"We are grateful for the support from so many people from within our rugby community, including the volunteers who are the guardians of the game's values, from other sports and from the wider community here and around the world, who have supported our stance.

"We will remain focused on getting on with the job of building our game, supporting our teams, encouraging more people to play rugby and upholding the values that generations of Wallabies and Waratahs have represented with pride."

A source close to Folau has told the ABC the amount of compensation and damages he is seeking could be as much as $10 million .

That amount includes around $5 million in lost salary and commercial opportunities.

Folau had been employed by RA on a contract worth several million dollars that still had more than three years to run.

The court case will test RA's right to dismiss Folau for breaching his contract, versus his right to express his religious beliefs.

It is understood all Australian sports will be watching the outcome closely as most have similar codes of conduct to RA's.

Folau's brother quits Waratahs

Folau's brother, 24-year-old John Folau, has quit the NSW Waratahs less than three weeks after the Wallabies superstar had his contract torn up.

John Folau made eight appearances for the Parramatta Eels in the NRL before switching codes last year.

Like his brother, John Folau played in the NRL before he joined the NSW Waratahs. ( AAP: Paul Miller )

Coach Daryl Gibson said John Folau had been grappling with "divided loyalties" before being granted a release from the Waratahs.

The ordeal of seeing his brother sacked appears to have taken its toll on the young backline utility.

"We gave John some time off for leave and he has come back to us recently and asked for a release, which we're happy to grant," Gibson said.

"John has been in a difficult position for the last wee while. He has got really divided loyalties to his family and his brother and then also to the team.

"He wanted to stress how much he enjoyed being with the team and what a difficult decision it was for him."

John Folau did not play a match for the Waratahs.

Gibson said he was not sure whether John Folau would ever play rugby again.

ABC/AAP