Queensland Reds trio Izack Rodda, Isaac Lucas and Harry Hockings have all been stood down after refusing to agree to salary cuts and the club's participation in the Australian Government's JobKeeper scheme.
Reds players were due to return to training on Monday morning after more than two months away from the game, but Rodda, Lucas and Hockings will play no part in team operations for the foreseeable future.
The news comes after Rugby Australia and the Rugby Union Players Association [RUPA] negotiated pay cuts of up to 60 percent last month in a bid to help the game avoid insolvency.
Rodda, Lucas and Hockings are all represented by agent Anthony Picone.
"Many industries in Australia are facing the same circumstances as sport in this country and the majority of our people have agreed to reduced hours under the federal JobKeeper legislation, which is assisting businesses such as ours through the COVID-19 pandemic," Queensland Rugby Union [QRU] chief executive David Hanham said.
"We understand this situation is difficult for everyone and individual decisions need to be made to protect the long-term viability of rugby in Queensland.
"As we have outlined before, these conditions are necessary at present and allow the QRU to create a financial bridge to the other side of this pandemic. Unfortunately, we have had to take the decision to stand-down three of our players. Given the recent negotiated player-payment reduction agreement, this was not a situation the QRU had expected to face.
"As we build towards the likely resumption of community and elite rugby, the QRU remains focused and on-track to deliver on its three goals during the COVID-19 period - to ensure the health and safety of our people, to protect the financial viability of the QRU and to ensure the safety and viability of our clubs."
This is the first known instance of an Australian Super Rugby player refusing the agreed salary cuts or JobKeeper scheme, though there have been multiple reports that other players would seek early releases from their contracts to pursue deals overseas.
But it isn't the first time the QRU has had difficult dealings with the players' agent Picone after he represented former Reds skipper Samu Kerevi during his negotiations and subsequent move to Suntory last year.
The QRU had earlier expressed frustrations with Picone after separate contract squabbles with some of his other clients including Will Genia, Liam Gill and Campbell Magnay.
The Australian last year reported that the QRU was planning to exclude Picone from all further contract negotiations following Kerevi's departure to Japan.
Rugby Australia's director of rugby Scott Johnson was hopeful the situation with each of Rodda, Lucas and Hockings could be resolved despite a potential legal battle.
"This is an unfortunate situation given we have an agreement in place for the interim period while the game navigates the COVID-19 situation," Johnson said.
"We want the players to remain in Australia and honour their contracts with the Reds and Rugby Australia. We are aware they are looking at their legal position, but we hope this can be resolved with the players as soon as possible and we will keep an open dialogue with them."
Rugby Australia is yet to finalise plans for a domestic Australian Super Rugby competition but it is understood the tournament will begin in early July. Both the Western Force and Japan's Sunwolves could be involved alongside Australia's four Super Rugby franchises, with a final decision on the format expected before the end of the month.