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.

"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.