Declaring on Monday that Folau was in breach of contract, Castle said: "Following the events of a year ago, Israel was warned formally and repeatedly about the expectations of him as a player for the Wallabies and NSW Waratahs with regards to social media use and he has failed to meet those obligations".
Rugby Australia has made it clear that his presence in the sport is no longer tenable, Wallabies coach Michael Cheika has declared that he would not select Folau again and national team sponsor Qantas also condemned the player's social media stance.
Israel Folau and Rugby Australia boss Raelene Castle.
The 30-year-old posted an image saying that "hell awaits" for gay people.
Rugby Australia had issued Folau with a notice of termination on Monday, giving him 48 hours to accept the sanction or refer the matter to a code of conduct hearing.
RA believe they are still on safe ground, because they will argue the Wallaby star breached the standard player code of conduct by vilifying others due to their sexuality.
"Rugby Australia will now make arrangements with the Rugby Union Players' Association (RUPA) to bring together the Code of Conduct hearing", the statement read.
Folau may have grounds to fight the ruling, with RA's failure to include a social media clause in his new contract set to be a key element in his hearing.
Castle said Folau was warned formally and repeatedly previous year about the expectation of him as a Wallabies and Waratahs player in regards to his social media use, following similar controversial posts.
That would force Rugby Australia to decide whether to tear up his lucrative contract, just five months out from the World Cup.
"They could take action against Rugby Australia as their employer under vicarious liability for the conduct of the employee, or they could take action against the individual Folau".
Folau - who has played at an elite level in three different football codes - had said in February that playing in the tournament was a key reason why he had re-signed with the Wallabies and Waratahs.
"First and foremost, I live for God now", Folau told The Sydney Morning Herald Sunday.
"I've refereed those players in the past and they've treated me with respect", Owens said. "Reading what he said after it, there's no apology, I just can't see a way back for him and I think that's quite sad to be honest with you".