The former NRL star was arrested on suspicion of possessing illegal drugs, with local media reporting the police were called to a Tokyo restaurant after 31-year-old was involved in an altercation with another patron.

The NEC Green Rockets, where former Wallabies mentor Michael Cheika is coaching director, issued a brief statement on Tuesday revealing that Ferguson's contract had been terminated.

On Wednesday, the club released a far broader offering, confirming after consideration their participation in their Top League January 8 opener.

"With the intention of restoring trust through full play and fulfilling our responsibilities for sports promotion and regional revitalisation, including rugby," the statement continued.

The "deeply apologetic" club took responsibility for Ferguson's actions, stating they would conduct a widespread staffing restructure to ensure there was no repeat.

The club will also donate a portion of the proceeds from home games this year to combat the eradication of illegal drugs in the league.

All players were drug tested and made to take a pledge after compliance measures were reiterated.

"We sincerely apologise for the great concern and inconvenience caused to everyone involved at the very important time that the start of Japan Rugby League One is imminent, and that it has greatly betrayed the expectations of everyone who supports and supports the team on a daily basis," the statement read.

"We will work together as a team to earnestly strive to restore your trust as soon as possible."

New Zealander Joel Everson served 23 days in a Japanese prison in 2020 after testing positive for the use of cocaine while playing for Hino Red Dolphins.

In a mark of how seriously rugby officials took the matter, all matches in the-then Top League were suspended for three weeks after Everson's arrest and the Red Dolphins cancelled all their remaining fixtures for the season.

Australian Associated Press