Dual-code international Israel Folau, who was sacked by Rugby Australia in 2019 for saying "hell awaits" gay people, will play club rugby in Japan next season, it was announced Monday.

Folau has signed with the NTT Communications Shining Arcs in the premier domestic competition when it starts its new season in January 2022, the Japan Rugby Football Union announced.

He will be joined at his new club, based in Chiba near Tokyo, by director of rugby Rob Penney, who was sacked by NSW Waratahs in March after a nightmare five-loss start to the Super Rugby AU season.

Penney told the Sydney Morning Herald he was confident Japanese fans would get behind Folau.

"He's a world class player, still got a bit of petrol in the tank and he'll make a massive contribution up there," Penney said.

"The Japanese people will really embrace him for his sporting prowess."

Folau was released "with immediate effect" by French rugby league side Catalans Dragons last week.

The 32-year-old had informed the club he wanted to stay in Australia for what the Dragons said was "a personal family situation", and also play for small-town club Southport Tigers alongside his two brothers.

Folau -- an ardent Christian -- was a star NRL player early in his career, then switched to rugby union after an unsuccessful stint playing Australian Rules.

He scored 37 tries in 73 rugby union Tests for the Wallabies before being dumped over a social media post warning "hell awaits" gay people and others he considers sinners.

His comments drew a stern rebuke from Japan captain Michael Leitch, who called them "outrageous" in a video posted on social media in April 2019.

Israel Folau was released by Catalan Dragons last week
Israel Folau was released by Catalan Dragons last week AFP / RAYMOND ROIG

"It's so wrong on so many levels," Leitch said then.

"I respect your religion and what you believe in, but using social media to almost preach your views -- it connects to so many people, and everyone's not the same."

"It's a real stab in the heart," added Leitch, who will face off against Folau next season.

Japan's domestic league has attracted several big names in recent years, with All Black Beauden Barrett and Wallabies captain Michael Hooper among those playing there last season.

Folau will play alongside former Scotland captain Greig Laidlaw at NTT.

Penney is looking forward to the challenge and is glad to have Folau to call on.

"It'll be great to have him back in our game, I reckon," he told the Sydney Morning Herald.

"It's people like him who can do special things. We just need to have him involved, don't we."

Rugby Australia's sacking of Folau sparked a long-running legal dispute that was eventually settled when they made a multi-million dollar out-of-court payment.

Folau said he had been "vindicated" by the settlement, after challenging his dismissal under laws that disallow sackings because of a person's religion.

He returned to the league in February last year with the Dragons.

In his latest battle, Folau this month applied for a Supreme Court injunction against Queensland Rugby League (QRL) in a bid to resume his career in Australia, claiming its refusal to register him amounted to a restraint of trade.