Rugby Australia said on Thursday it would terminate the contract of Israel Folau, the country's best-known and best-paid player, if he cannot offer a good reason for a social media post that said gay people would go to "hell" if they did not "repent".

The 30-year-old fullback, a fundamentalist Christian, posted similar comments last year but escaped sanction and signed a new deal with RA through 2022 in February.

That multi-million dollar contract looks certain to be torn up unless Folau can convince RA and the New South Wales Waratahs that there are "compelling mitigating factors" for sharing the post.

A statement from RA Chief Executive Raelene Castle and her Waratahs equivalent Andrew Hore said they had made repeated attempts to contact Folau since he posted the comments on Wednesday.

"Whilst Israel is entitled to his religious beliefs, the way in which he has expressed these beliefs is inconsistent with the values of the sport," the statement added.

"Israel has failed to understand that the expectation of him as a Rugby Australia and NSW Waratahs employee is that he cannot share material on social media that condemns, vilifies or discriminates against people on the basis of their sexuality.

"As a code we have made it clear to Israel formally and repeatedly that any social media posts or commentary that is in any way disrespectful to people because of their sexuality will result in disciplinary action.

"In the absence of compelling mitigating factors, it is our intention to terminate his contract."

The unprecedented move will throw into disarray Australia coach Michael Cheika's plans for the Rugby World Cup in Japan later this year.

Folau has been all but ever-present in the Wallabies number 15 shirt since switching to rugby union from Australian Rules in 2013 and scoring two tries on his test debut against the British and Irish Lions.

He has scored 35 more tries in 72 tests since and helped Australia to the final of the 2015 World Cup in England, where they were beaten by New Zealand.

An elusive and dangerous runner, Folau helped the Waratahs to the Super Rugby title in 2014 and only last weekend became the highest career try-scorer in the competition when he crossed for his 60th five-pointer.

Folau has had previous lucrative offers to play in Europe and Japan but his stated desire to remain in Australia makes his most likely destination a move back to rugby league, a code in which he represented Australia at the start of his career.

'A REAL STAB IN THE HEART'

Raised as a Mormon, Folau moved to a pentecostal church in 2011 and has made no secret of his religious beliefs since.

He was a critic of the proposal to make same-sex marriage legal in Australia before it was passed in 2017 and last year took to Instagram with his first post about gay people being destined for hell.

Castle said then that RA "accepted" his position that he had just been expressing his beliefs and had not intended to "upset people intentionally or bring hurt to the game".

Wednesday's post, which took the form of a meme based on verses from the bible, said gay people and others he perceived to be "living in sin," including "drunks", "idolaters" and "atheists", would be condemned to hell.

The post drew widespread condemnation from around the world with New Zealand Prime Minister Jacinda Ardern among those criticizing Folau for the way he was using "his platform."

Japan rugby captain Michael Leitch posted a video in Instagram in which he said Folau's comments were "wrong on so many levels" and could be "a real stab in the heart" for people struggling with their mental health.

The RA and Waratahs statement on Thursday said they wanted rugby to be a sport that unites and welcomes people regardless of their "race, gender, religion or sexuality."

"No language that isolates, divides or insults people based on any of those factors can be tolerated," it said.

Pride in Sport, which works to make Australian sport inclusive for LGBTQ people, later welcomed the decisive action taken by Castle and Hore.

"This unprecedented course of action sends a strong message of what will and will not be tolerated in rugby – and they've made it clear that homophobia and transphobia has no place in the sport," said Andrew Purchas, founder of the Sydney Convicts, Australia's first and most successful gay rugby club.

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