Roosters chairman Nick Politis is open to releasing Sam Walker immediately, The Courier Mail reported.
The club confirmed on Monday night that it had withdrawn its contract extension offer to the premiership-winning half.
Walker could leave after the 2027 season under the initial extension proposal, but talks had continued for months without agreement.
In August, the Roosters offered a four-year deal reportedly worth $1.1 million per season.
Walker put negotiations on hold in September to focus on the finals, where the Roosters claimed their first premiership since winning back-to-back titles in 2018 and 2019.
After the grand final, the offer was understood to have risen to $1.3 million annually, with clauses potentially lifting his salary to $1.5 million a year through 2031.
Agent Clinton Schifcofske confirmed the situation to the publication after the Roosters met Walker on Monday. Walker had been part of the Kangaroos team that beat Fiji 36-22.
"We weren't able to agree to terms," Schifcofske told the publication.
"Sam had an idea of what he wants, and they weren't prepared to do it, and that's what has happened.
"They are within their rights to do that (pull the deal), and Sam is within his rights to say no as well."