The Wallabies full back was found by an independent panel to have committed a high level breach of the players' code of conduct.
Folau has the right to appeal the decision and has 72 hours to do so, but it is believed he will neglect that option and instead take Rugby Australia to the Supreme Court.
"Rugby Australia did not choose to be in the situation, but Rugby Australia's position remains that Israel, through his actions, left us with no choice but to pursue the course of action resulting in today's outcome", Ms Castle said.
Castle also said Australian rugby still welcomed those with religious beliefs, declaring her confidence in Michael Cheika's ability to unite the Wallabies' diverse playing group for their Rugby World Cup campaign.
"As Australians, we are born with certain rights, including the right to freedom of religion and the right to freedom of expression". This issue has created an unwanted distraction in an important year for the sport and for the Wallabies team.
Devoutly Christian Wallabies star Israel Folau was sacked on Friday for homophobic comments in a case that sparked a bitter debate and looks to have ended his glittering career in Australia.
NSWRU boss Hore said: "While NSWRU is disappointed to lose a player of Israel's calibre, rugby has a code of conduct and values that we must adhere to ensure that our game remains a game for all, no matter people's background or beliefs".
Folau requested a code of conduct hearing in an attempt to fight the decision.
'I would like to thank my wife Maria for her love and encouragement to stay true to our beliefs. We have been humbled by the support we have received from family, friends, players, fans and the wider community.
Folau went to the tribunal to challenge Rugby Australia's intention to fire him after he posted that "hell awaits" gay people and others he says are sinners.
"Thank you also to those who have spoken out in my defence, some of whom do not share my beliefs but have defended my right to express them".
And the country's governing body chose to terminate Folau's four-year, multi-million-dollar contract, though the 30-year-old and devout Christian has 72 hours to appeal.
Castle said any discussions over a settlement had not proceeded beyond the two teams of lawyers and that given Folau's lack of remorse - the offending post is still on his feed - it was unlikely he would ever play for Australia again.
Folau was already on a warning after posting similar comments past year and Castle couldn't disguise her hurt at what she felt was a betrayal by the code-hopper.
Many people of different faiths have contacted us this week to say the Folau case has opened their eyes to the growing threats to freedom and changed their voting intentions.
The row upset backers of the game with sportswear company ASICS dumping him as a brand ambassador while Qantas, the Wallabies biggest sponsor, made clear it was not happy.
Castle said the league had many players who quoted the Bible on their social media platforms, noting Rugby Australia was "completely supportive of that".
His immediate playing future is unclear, although it will certainly not involve his Super Rugby club NSW Waratahs or the Wallabies, who will have to mount a World Cup campaign later this year without one of their best players.