Rugby Australia is set to issue Israel Folau a breach notice as early as Monday as NSW Rugby Union chairman Roger Davis warned it would be a "disaster" if the code was dragged through a protracted court battle with the Wallabies star.

Folau landed himself in hot water last Wednesday with a controversial Instagram post that suggested homosexuals and other groups - including drunks and atheists - were destined for hell. This time last year he was caught up in a similar furore but escaped sanction from RA after posting on social media that gays would go to hell.

Israel Folau is to be issued a breach notice by Rugby Australia for his controversial social media activity. Credit:AAP

It is understood RA will issue Folau a breach notice as early as Monday. He will have 48 hours to respond and request a code of conduct hearing, which is a requirement as part of the game's collective bargaining agreement with players.

If Folau responds as soon as he is issued the breach notice, the wheels will be in motion as quickly as possible to organise a hearing.