Israel Folau will challenge his sacking by Rugby Australia, according to a report.

The Australian Financial Review reports the former Wallabies star has hired commercial law firm Macpherson Kelley to lodge a legal challenge after he was fired for saying homosexuals will go to hell in an April 10 Instagram post.

The firm's head of employment George Haros said they believe Rugby Australia acted "unlawfully".

"We believe Rugby Australia and the Waratahs have acted unfairly and unlawfully in their treatment of Israel," Haros told the AFR.

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"Israel has several options available to him at this point, and we are considering his next steps."

Haros will work closely with Melbourne-based silk Stuart Wood QC, a leading lawyer in unlawful termination cases where free speech is a central issue, on a case likely involving claims of unlawful termination and breach of contract under the Fair Work Act, the AFR reports.

The Fair Work Act protects employees from unlawful dismissal on religious grounds.

Folau was sacked on May 20 and has until Monday to begin that process with the Fair Work Commission, which is where he is expected to take up the legal fight.

The 30-year-old decided not to appeal through Rugby Australia's internal channels, saying that he feared he would receive unfair treatment during the process.

"My decision not to commence Rugby Australia's appeal process is in no way an acceptance of the judicial panel's findings," Folau said in a statement.

"I simply do not have confidence in Rugby Australia's ability to treat me fairly or lawfully throughout this process."