Sam Walker made his Australia debut at No. 7 in Sunday night's 36-22 win over Fiji, after helping the Sydney Roosters win the NRL premiership.
He returned from a syndesmosis injury one week before the grand final, matching the all-time record for recovery time.
Earlier this year, Walker represented Queensland on his State of Origin debut.
He told AAP several times over the past month that he wanted to extend his Roosters contract beyond 2027.
Before his Kangaroos debut, Walker said he wanted to play against Fiji before considering extension talks.
"My preference is obviously to stay at the Roosters," he said.
On Monday night, the club informed his management it had withdrawn its extension offer after the parties failed to agree on terms.
The Roosters said recruitment and retention decisions would support a premiership-winning roster and the squad's strength, balance and long-term success.
Walker, a childhood Roosters supporter, is contracted to the club for 2027 and has played 109 NRL games since his 2021 debut.
If negotiations do not resume, he will be the game's most sought-after half after November 1.