Rugby Australia and Israel Folau have failed to reach an agreement over the former Wallaby's sacking during a meeting lasting almost four hours, with the dispute now destined for court.
Representatives from both parties met at the Fair Work Commission on Friday for a mediation hearing - the first formal step in the unfair dismissal case.
"We are disappointed that we were unable to reach settlement with Rugby Australia today," Folau's lawyer George Haros told reporters in Sydney.
"It appears as though that unless things change, we'll be heading to court."
Folau said he was "very, very disappointed by the outcome".
"But I'd like to thank all those that have supported me throughout this time. I will continue to stand up for the freedoms of all Australians," Folau said.
Rugby Australia and NSW Rugby Union also said they were disappointed the conciliation had been unsuccessful and failed to reach a resolution.
"We remain confident in our processes and will continue to do what is required to defend the values that underpin our game," RA said in a statement.
Folau had hoped RA would apologise for terminating his multi-million dollar contract over a social media post in which he paraphrased a Bible passage saying "drunks, homosexuals, adulterers, liars, fornicators, thieves, atheists and idolaters" would go to hell unless they repented.
The committed Christian argues he was unfairly dismissed on religious grounds.
Folau, 30, is seeking $10 million in damages from RA and wants his multimillion-dollar contract reinstated.
In a video posted on his website before Friday's meeting, Folau said he hoped RA would accept his termination was unlawful and reach an agreement about how to fix the "mistake".
"First and foremost, I am hoping for an apology from Rugby Australia and an acknowledgement that even if they disagree with my views, that I should be free to peacefully express my religious beliefs without fear of retribution or exclusion," he said.
Folau on Thursday said RA had offered him money to remove the post at the centre of the dispute, and he had declined because sharing the Bible was one of his duties as a Christian.
"I couldn't do that ... I couldn't live with that," Folau said.
"It certainly comes from a place of love and it's nothing personal."
But RA said Folau's claim was "completely untrue" and it never offered him money to remove the posts.
The sportsman was swamped by media when he arrived at the Fair Work Commission on Friday, flanked by his legal team.
He shook hands and thanked a supporter, who said "God go with you brother ... we're praying for you".
RA chief executive Raelene Castle arrived early and without fanfare, driving herself into the car park.
More than 20,000 people have donated about $2.2 million to help fund Folau's legal battle via a campaign page set up by the Australian Christian Lobby.
The ACL effort replaced an earlier campaign on GoFundMe, which was taken down by the platform for breaching its service guidelines.
"I want to thank you all for your prayers and your support. You have made it possible for me to stand up for every Australian of faith," Folau said.
"I know we are strong enough to tolerate different views without firing people from their jobs for expressing religious beliefs that not everybody agrees with."
