Cronulla Sharks chairman Damian Keogh has announced his resignation from the NRL club's board after he was handed an 18-month good behaviour bond in a Sydney court for possessing a prohibited drug.

In early May, police found a resealable bag of white powder on the 55-year-old after searching him at a licensed premises in Woolloomooloo.

At the time, he stood down from his role at the club.

Keogh today appeared in Sydney's Downing Centre Local Court and pleaded guilty to cocaine possession.

Deputy Chief Magistrate Jane Mottley decided not to record a conviction.

"With regards to the Sharks, I have decided to step down entirely from the board," Keogh said outside court.

"I recognise my ongoing involvement with the club has the potential to be an unnecessary distraction."

Keogh's barrister Murugan Thangaraj SC told the court the former professional basketballer had been made a Member of the Order of Australia for his service to the community and sport.

The lawyer also said Keogh had loaned Cronulla more than $1 million "in order to keep them afloat", and had led them from trouble to a premiership.

Ms Mottley said Keogh was well-regarded and she took into account it was his first drug offence.

The magistrate told the court Keogh had been passed the drug by someone else.

"Someone of your age and experience should have simply passed it back," she said.

AAP