Fallen star Israel Folau has launched legal action against Rugby Australia and the NSW Waratahs for unfair dismissal, he said Thursday, demanding an apology, compensation and the right to play again after he was sacked for making homophobic comments.

Super Rugby's record try-scorer, who was on a A$1 million-a-year ($690,000), four-year contract, was fired in May for posting online that "hell awaits" gay people and others he considers sinners.

The devout Christian opted not to appeal and mediation attempts failed, prompting Folau to take the highly divisive case, which has drawn support from conservatives and outrage elsewhere, to the courts.

"A conciliation before the Fair Work Commission did not resolve the matters between us. Accordingly, I am commencing court proceedings against Rugby Australia and the NSW Waratahs," he said in a video message.

Folau, who has played 73 times for the Wallabies, raised more than A$2 million in just two days through the Australian Christian Lobby to help pay his legal fees, before the appeal was paused, with enough money "for now."

It replaced a GoFundMe crowdfunding campaign that was shut down after raising more than A$700,000, with the platform saying it would not "tolerate the promotion of discrimination or exclusion."

Folau's claim, lodged with the Federal Circuit Court in Melbourne on Wednesday and seen by AFP, argued he was unlawfully dismissed under a section of Australia's Fair Work Act that disallows sackings because of a person's religion.

It said the 30-year-old was seeking compensation, interest, damages, injunctive and declaratory relief, along with an apology.

Previous reports put the compensation figure at A$10 million, including for lost sponsorship and marketing opportunities, a sum that could prove disastrous for Rugby Australia.

"Mr Folau is an elite sportsman and record try-scorer who should be playing for the NSW Waratahs and the Wallabies, including in the upcoming Rugby World Cup," his lawyers said.

"His form and natural talent suggest he would continue to be a star player for both teams."

It added there was nothing unlawful about uploading religious content to social media.

"This benign conduct, which the community accepts is a recognised fundamental human right and freedom, did not justify any punitive action being taken against him by his employer under the player contract or otherwise," the claim stated.