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Former NRL premiership winner Blake Ferguson has lost his contract with Japanese rugby club NEC Green Rockets after a drug-related arrest.

Blake Ferguson has had his Japanese rugby contract torn up without playing a game after the former NRL star was arrested on suspicion of possessing illegal drugs.

According to local media, police were called to a restaurant in the Roppongi area of Tokyo on Thursday after 31-year-old Ferguson was involved in an altercation with another patron.

The winger, who left Parramatta at the end of the 2021 NRL season to try his hand in Japanese club rugby union, was searched at Azabu police station and allegedly found with the drugs - reportedly cocaine.

The 31-year-old, who won a premiership with the Roosters in 2018, signed with NEC Green Rockets, where former Wallabies mentor Michael Cheika is coaching director.

The club's domestic season in the newly renamed League One begins on January 8 against the Yokohama Canon Eagles.

But Ferguson won't be there, the club confirming in a brief, updated statement on Monday that Ferguson's contract had been cancelled on January 2.

New Zealander Joel Everson served 23 days in a Japanese prison in 2020 after testing positive for the use of cocaine while playing for Hino Red Dolphins.

In a mark of how seriously rugby officials took the matter, all matches in the-then Top League were suspended for three weeks after Everson's arrest and the Red Dolphins cancelled all their remaining fixtures for the season.

The Department of Foreign Affairs and Trade is reportedly providing consular assistance to Ferguson.