Bayonne are expected to officially confirm on Monday that Wales scrum-half Mike Phillips' contract with the French club has been terminated.
Press Association Sport understands that the decision to end Phillips' deal, which was due to run out at the end of the season, was made by the club's board on Saturday.
Phillips had faced an internal disciplinary hearing on Tuesday after it was alleged that he attended a video analysis session while drunk.
Phillips was accused of being intoxicated when the squad met on October 11, the morning after Grenoble had been defeated 37-6 in the Amlin Challenge Cup.
Team-mates Dwayne Haare and Stephen Brett also faced the board last Tuesday to answer for their involvement in the same incident.
Phillips sat out Friday's 24-19 victory over Montpellier, but Brett started the match while Haare was included on the bench.
The day before the game, Phillips used his Twitter account to apologise to Bayonne supporters "for this situation".
The two-time British and Irish Lions tourist was expected to join the Wales squad on Sunday night ahead of their autumn series against South Africa, Argentina, Tonga and Australia.
Wales head coach Warren Gatland last week offered Phillips his full support as the 31-year-old waited for the outcome of Bayonne's disciplinary hearing.
"We will sit down and have a quiet chat about where his head's at and what he's doing, but there will be no sanctions for him in this set-up," Gatland said.
Phillips has a chequered disciplinary record, but remains a high-quality player and there will be no shortage of clubs willing to take him on.
He was fined and suspended for 10 days by relegation-threatened Bayonne for an off-field incident last year and was banned by Wales in 2011 following a confrontation with a doorman in Cardiff.
Phillips, capped 77 times and a veteran of the 2008 and 2012 Grand Slam triumphs, was a central figure during the Lions' series victory over Australia last summer.
He left the Ospreys for Bayonne in 2011.