Homophobic comments by ­Israel Folau amounted to a "high-level" breach of rugby's code of conduct, a tribunal ruled Tuesday, leaving the Wallabies star's glittering career hanging in the balance.

The devoutly Christian Folau went to the hearing to challenge Rugby Australia's intention to sack him from his lucrative four-year deal after he posted on social media that "hell awaits" gay people and others he says are sinners.

The governing body declared his actions a "high-level" breach, the only level that allows termination of a contract, and the three-person panel agreed after three days of legal wrangling. Folau, Rugby Australia chief Raelene Castle and Wallabies coach Michael Cheika all gave evidence.

A decision on his punishment has yet to be made, but it could range from the unlikely scenario of allowing him to return to training and playing with the NSW Waratahs, firing him, or issuing fines or suspensions.

"The panel has today provided a judgement that Israel Folau committed a high-level breach of the Professional Players' Code of Conduct with his social media posts on April 10, 2019," Rugby Australia said.

"The panel will now take further written submissions from the parties to consider the matter of sanction."

No timescale was given, but legal experts have warned that whatever happens an appeal is likely, potentially followed by a drawn-out court battle.

Earlier Tuesday, Waratahs chairman Roger Davis called for a "common-sense" settlement, saying it was important to bring the matter to a close and prevent more negative headlines dominating the sport in the weeks and months ahead.

"This is a no-win situation for the game and fans and I'd like to see it resolved as quickly as possible," he told the Sydney Morning Herald.

"I think a settlement is a common-sense approach... it would be smart. If this goes for a long time there are definitely no winners."

Over the weekend, Sydney's Daily Telegraph newspaper said an A$1 million ($700,000) offer was made to Folau in a bid to avoid the tribunal, although Rugby Australia has denied the report.