Former NSW State of Origin winger James McManus is taking legal action against the Newcastle Knights over the club's handling of his concussions in a landmark case that will have huge ramifications for Australian sport.

The case, which begins with a directions hearing in the Supreme Court next month, is sure to be closely scrutinised by the legal and sporting fraternity and could result in more actions being taken against sporting clubs and bodies for negligence.

Heady daze: James McManus is talking legal action against the Newcastle Knights over the club's handling of his concussions.

McManus made all of his 166 NRL appearances for the Knights in a career that also included three Origin games. However, the career of the Scotland-born three-quarter came to a premature halt after suffering the last in a series of concussions in the round-20 loss to South Sydney in July of 2015. McManus sat out the remainder of that season and didn't play again, officially announcing his retirement from the game on medical grounds in August of last year. He has since been working for Newcastle in a business development role in the club's corporate team.

Knights chairman Brian McGuigan said the club respected McManus' right to sue, but would be defending its handling of his concussions.