The Sunwolves will not be a part of the upcoming Super Rugby AU competition, effectively ending their time as a professional rugby side.
The news brings to an end the Sunwolves' time in professional rugby after the Japanese franchise was already axed from Super Rugby from 2021 and beyond.
Their final season of Super Rugby was shut down in March, with New Zealand and Australia having to turn to domestic options to try and keep their seasons alive.
Rugby Australia had held out hope that they could have the Sunwolves in a six-team competition but with players needing to arrive from a number of different countries to be involved, the government opted against approving their involvement.
Under current laws, the Sunwolves would have to quarantine for two weeks upon arriving in Australia and then be based in a quarantine hub during the 12-week competition.
"There are significant challenges facing the Sunwolves’ participation in this modified competition model which Rugby Australia, SANZAAR and the Sunwolves have been attempting to work through. However, the reality is, given the timeframe available the team’s preparation for the competition would be severely compromised," he said.
“All parties agree that despite our collective efforts and desire to see the Sunwolves take part in the competition, under the current circumstances their participation will not be feasible. While unfortunate, this decision delivers the certainty that all stakeholders require at this point in time.
“We all agree that this is not the way we wanted or believed that the 2020 Super Rugby season would play out when it kicked off back in late January, the impact of COVID-19 has been unprecedented and unforeseen.
“On behalf of Rugby Australia, our SANZAAR partners and the Rugby community I pass on our thanks to the Sunwolves and we look forward to continuing to build on the links between Australia and Japan on and off the Rugby field.”
Super Rugby AU will involve the five professional Australian teams and it is aiming to kick off on July 3.
Broadcaster discussions are the final piece of the puzzle in the bid to start the competition and more details, including a draw, are expected to be revealed later this week.