Rugby Australia have made their move to sack Israel Folau.

The organisation have issued Folau a breach notice, with the Wallabies star set to see his contract terminated over his anti-gay social media posts last week.

Folau sparked outrage after posting to his Instagram account last Wednesday night that "hell awaits drunks, homosexuals, adulterers, liars, fornicators, thieves, atheists and idolators" — adding they should "repent".

Now, after initially indicating they would move to terminate Folau's contract, Rugby Australia have taken the next step.

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"At its core, this is an issue of the responsibilities an employee owes to their employer and the commitments they make to their employer to abide by their employer's policies and procedures and adhere to their employer's values," Rugby Australia said in a statement.

"Following the events of last year, Israel was warned formally and repeatedly about the expectations of him as player for the Wallabies and NSW Waratahs with regards to social media use and he has failed to meet those obligations. It was made clear to him that any social media posts or commentary that is in any way disrespectful to people because of their sexuality will result in disciplinary action.

"All professional Rugby players in Australia are bound by the Code of Conduct and there is a process in place for any disciplinary matter. We appreciate that this particular matter will attract significant interest, but due process must be followed."

Folau has 48 hours to respond to accept the sanction or have the matter referred to a Code of Conduct hearing.

Wallabies coach Michael Cheika said Folau was unlikely to play for him again in an Australia shirt. He fronted the media alongside Wallabies captain Michael Hooper and NSW Waratahs coach Daryl Gibson.

Neither Cheika nor Gibson have spoken to Folau, but Hooper said he had exchanged a brief text message with his Waratahs and Wallabies teammate.

Cheika said he had already formed the view that Folau couldn't be chosen for the Wallabies after his latest posting. In 2017, Folau was warned by Rugby Australia after his use of social media to express opposition to gay marriage.

Chieka said Folau's latest comments crossed a line.

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"We've had the discussion about it after the last time about his right to believe and our support in that," he said. "But getting out in that disrespectful manner publicly is not what our team's about.

"We've had the discussion about it and that line's then been crossed. When you play in the gold (Wallabies) jersey, we're representing everyone in Australia.

"I felt that I needed to talk to him (Folau) about why, but I haven't had that chance as yet."