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Sacked Wallabies fullback Israel Folau, who had been chasing a rugby league comeback in Queensland, has signed on to play club rugby in Japan.

Israel Folau has signed with Japanese Top League side NTT Communications in a fresh twist after the sacked Wallabies fullback's recent attempts to resurrect his rugby league career in Queensland.

With the backing of billionaire businessman Clive Palmer, Folau engaged lawyers to fight his case for a return for Southport in Gold Coast club football, despite failing to receive a contract clearance from French outfit Catalans.

That clearance came last week and a deal with the Top League club, which also announced sacked Waratahs coach Rob Penney as the new director of rugby, followed in a move that has reportedly taken Palmer by surprise.

Folau's Wallabies career ended following a homophobic social media post that saw his contract torn up in 2019.

A drawn-out legal battle with Rugby Australia followed before he signed with the Catalans Dragons in the UK Super League.

Citing personal reasons, he returned to Australia while still under contract and pushed his case with the QRL for a return.

Folau was set to play for the Southport Tigers last weekend before COVID-19 restrictions put paid to the clash.

The timing of the Japanese season - Folau isn't due there until September - means he could still feature for the Tigers this year.

It's understood Folau's Japan contract is significantly less than his $1 million a season deal with Rugby Australia, while it carries strict clauses relating to his social media activity.

The three-time Wallabies player of the year is eligible to play for the national side again under the Giteau Law - he has played 73 Tests - but it is understood he is not on coach Dave Rennie's radar.