Rugby Australia has rejected an application from a consortium seeking to take over the Melbourne Rebels with the decision made to shut the club down after 14 seasons.
The news was delivered to staff and players on Thursday morning, as the club prepares for a first ever Super Rugby finals appearance.
The Rebels had been in administration since January this year with debts owed to creditors exceeding $23 million.
A consortium led by business heavyweight Leigh Clifford put forward a plan to fund the club until 2030 dependent on RA handing back the licence to them, with funding promises.
The Melbourne Rebels' 14-year run is over after the club went into administration in January (pictured, Rebels stars look dejected during last Friday's loss to the Brumbies)
The Super Rugby side owes creditors more than $23 million (pictured, Rebels players get ready to pack into a scrum against the Brumbies last Friday)
But RA boss Phil Waugh said the identity of the consortium members had not been disclosed, their credentials were unable to be fully assessed and the lack of detail made available created an 'unacceptable level of risk' and the decision was made to shut the club down.
'It has been a testament to the players, coaches, team management and support staff that they have managed to deliver such a competitive season on the field in extremely difficult circumstances - and we are looking forward to seeing the team fighting in the Finals for the first time ever,' Waugh said.
'I want to thank the Rugby community for its patience and ongoing support of the code. Rugby Australia's focus right now is on supporting the impacted staff and players at the Rebels.
Melbourne star Pone Fa'amausili (right) and two of his teammates leave a team meeting on Thursday, shortly after the shocking news broke
Rugby Australia CEO Phil Waugh (pictured) delivered the bombshell news on Thursday after the governing body rejected the team's bid to stay alive
'We have a plan that will ensure Rugby has a strong future in Victoria - the infrastructure and the systems remain unchanged despite the change to the professional game in 2025, and we will continue to look for opportunities to increase that investment in the game in Victoria.
'As Australian Rugby evolves, we will consider the game's professional footprint, and how it best serves the game and Super Rugby.
'We will continue to work closely with the Victorian Government and Visit Victoria on major events for the future, and we are looking forward to the Wallabies taking on Wales at AAMI Park this July.
Axing the club has left stars like Ryan Louwrens (pictured) with an uncertain future despite the team being on the verge of making their first ever finals appearance
'RA is evaluating possibilities for the tour game for the 2025 British & Irish Lions Tour scheduled for Marvel Stadium on 22 July 2025 and is working with the Lions on the successful delivery of that event.'
The decision leaves players in limbo with RA and the Rugby Union Players Association (RUPA) still to discuss options for player movement within Australian rugby.
Players who were contracted to the Rebels through to the end of 2025, including the likes of Wallabies star Taniela Tupou, have the option of playing overseas with their contracts now void.
The Rebels will play their final regular season game against the Fijian Drua on Saturday in Fiji.