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Folau, a fundamentalist Christian, faced a three-member panel over three days of hearings to decide whether he had breached the code of conduct with a social media post that said 'hell' awaited 'drunks, homosexuals, adulterers' and others.
"The panel has today provided a judgement that Israel Folau committed a high-level breach of the Professional Players' Code of Conduct with his social media posts on April 10, 2019," Rugby Australia said in a news release.
"The panel will now take further written submissions from the parties to consider the matter of sanction."
RA and Folau's Super Rugby side, the New South Wales Waratahs, have already publicly committed to terminating the player's contract.
Folau's trial has stretched far beyond the rugby pitch, triggering a wider debate about freedom of speech and the power of employers to control their employees away from the workplace.