The NRL has reportedly rejected a claim by Manly to exempt retiring veteran Brett Stewart from this season's salary cap.
Stewart is retiring with a year left on his contract due to chronic knee injuries, and the Sea Eagles had sought a medical retirement clearance from the game's governing body.
But Fairfax Media reports that the NRL has turned the club down, saying it wasn't a one-off injury that caused Stewart to quit the game, but rather a buildup of his consistent knee injuries.
The NRL is reportedly still considering an identical claim from Stewart's Sea Eagles teammate Steve Matai, who has long suffered neck and shoulder complaints.
A medical retirement clearance allows a club to exclude the player's contract value from the salary cap, while also entitling the player to an insurance payout.
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The NRL's rejection of Stewart's case means the Sea Eagles will be forced to pay out the final year of his contract, which will be included in the cap.
Manly has confirmed neither player has been able to participate in the pre-season due to their injuries.
"The Sea Eagles are working closely with the NRL, the RLPA, and the players' respective managers George Mimis (Stewart) and Gavin Orr (Matai) to give the players a dignified and respectful exit from their brilliant careers," the club said earlier on Friday in a statement.
"Both players have been unable to train in preparation for the 2017 NRL season as a result of surgery at the end of 2016 and the inability to receive medical clearance to train.
"Manly Sea Eagles are working with the management of both players to give them the farewell they deserve in front of their thousands of adoring fans."
Both players were a part of Manly's premiership teams in 2008 and 2011.
Stewart was a tryscoring machine at his peak, getting over the stripe 163 times in 233 appearances in the maroon and white.
The end of the pair's careers comes on the heels of the retirement of captain Jamie Lyon and a 2016 season in which Manly failed to make the finals for the second year in a row.
