Wallaby and Reds back Karmichael Hunt was stood down from any rugby activities, after he was charged with drug possession.
The Reds and the Australian Rugby Union said Hunt "agreed" that it is in the best interests of all parties that he is stood down immediately.
This includes any team-related activities, training and playing commitments.
"The parties are awaiting information from the Queensland Police, pertaining to the circumstances of the recent allegations, before any next steps or a return to rugby activities will be contemplated," the statement said.
"Karmichael Hunt is cooperating fully with the Rugby Australia integrity unit and the Queensland Rugby Union investigation.
"Given that this is an ongoing police matter, there will be no further comment from the parties."
Hunt, a Rugby League convert who made his Wallaby debut this year, was detained along with another man in Brisbane early on Saturday morning during a "random street stop".
He was allegedly caught with a white powder, which local media said was cocaine.
His lawyer Adam Ma gill said Hunt was "devastated and very upset".
"He is not in a good way emotionally," Magill told the Australian Broadcasting Corporation.
"The penny is starting to drop and he is just coming to terms with what is in jeopardy."
Hunt re-signed with the Reds last month for another two years.
It is not the first time Hunt had been in trouble with the law.
He was banned for six weeks and fined AU$30,000 (US$23,500) by the Reds in 2015 after pleading guilty to four charges of cocaine possession.
As well as being fined by the franchise, he was stripped of the Reds' vice-captaincy and ordered to pay AU$2,500 by magistrates on Queensland's Gold Coast.
Despite the setback, he managed to re-establish himself at the Reds, and made his Wallabies debut this year, becoming one of the stars of Australia's home Tests in June.
Hunt is also not the first Rugby League convert to fall foul of Rugby Union regulations that are not as tolerant to 'social drugs' as League.
Wendell Sailor, who played for the Reds and Waratahs and made 37 Test appearances for Australia, was banned for two years after testing positive for cocaine use.
The sad saga of cocaine use among rugby players is not unique to Rugby League.
Earlier this year Wallaby back James O’Connor’s and All Blacks lock Ali Williams were busted for cocaine in France.
Hunt is due to appear in court on January 29.