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Emerging Sydney star Jordan Dawson has rejected the AFL club's offer of a contract extension citing his desire to return home to South Australia.

Port Adelaide and Adelaide are in a race to sign Jordan Dawson after the emerging star informed Sydney of his desire to return home to South Australia.

Dawson took his game to new a level this year, finishing third in the Swans' club champion award behind Luke Parker and Jake Lloyd.

The 24-year-old has played 64 games since making his debut in 2017, but he rejected Sydney's offer of a contract extension citing his desire to return home.

"Jordan has indicated to the club his desire to return to South Australia to be closer to family," Sydney's general manager of football Charlie Gardiner said.

"Jordan has been weighing up this decision for some time and despite there being an attractive long-term deal on offer with the Swans, he has arrived at the decision that he would like to return home.

"The news is obviously disappointing for the club. Jordan is a young, hugely talented player who is coming off a breakout season in 2021, which only adds to the disappointment.

"Given we have only learned the news this afternoon, we will take some time to work through the club's options leading into the trade period."

Both the Power and Crows are interested in signing Jordan, who can play both in defence and on the wing.