The troubled career of James O'Connor has taken another turn with the former Wallabies back being released from the Queensland Reds on Tuesday with one year to go on a two-year contract.

O'Connor, 25, missed out on a berth in the Wallabies World Cup squad, but while recovering from a knee and ankle operation he has followed the tournament and has posted regular videos on Twitter analysing the games.

However, the Queenslander's playing future has now been thrown into doubt again with the announcement on Tuesday that the Reds have let him go "effective immediately."

A Queensland Rugby Union statement said the decision "was due to a number of personal issues" that the QRU, Australian Rugby Union and Rugby Union Players' Association "have been aware of since May".

QRU chief executive Jim Carmichael also said in the statement that the union had enacted its release clause in their deal with O'Connor who he said is now expected to return to Europe to avoid the attention that will be on him after this latest development.

"James has experienced a difficult time personally since returning to Australia and we've been aware of that for some time," Carmichael said in the QRU statement.

"It is disappointing that James was not able to reach his full potential while he was with us but after a great deal of thought we believe it is in his and the Reds' best interests that we exercise our release clause in his contract.

"Therefore, James will return to Europe where he feels the spotlight on him is less intense.

"In our discussions, we've agreed that should James return to Australia to play rugby in the future, the Reds will have the first and last rights to secure his services."

O'Connor said in the same statement that he was disappointed not being able to fulfil his ambitions at the Reds whom he joined in January from France where he was playing with Toulon. He cited "personal matters" behind the decision for him to leave the Reds.

"I came to the Reds with the intention of playing my best football in my home state and looking for a fresh start but I've struggled with some personal matters," O'Connor said.

"The Reds are a wonderful team and organisation and I'm very disappointed I wasn't able to achieve my full potential for my home state."

O'Connor was lauded for his "willingness" to address his personal issues with the QRU and RUPA.

"James' willingness to be proactive and speak to the Reds and RUPA regarding matters that too often are suppressed until it is too late are testament to his development and maturing," RUPA chief executive Ross Xenos said.

"James is a player of enormous talent and we all hope he will benefit from time and space out of the spotlight to return to Australian Rugby in the future.

"In releasing James, the Reds have clearly shown their commitment to the welfare of their people and credit to them for their leadership and understanding."

The Reds are the third Australian Super Rugby franchise that O'Connor has played with after stints at the Western Force (2008-2011) and Melbourne Rebels (2012-2013).

O'Connor signed with the Reds ahead of his return for this year's Super Rugby season from two years playing overseas – first in England with London Irish and then with Toulon.

O'Connor, who has 44 Test caps, was once regarded as a "golden boy" of Australian rugby.

He made his Wallabies debut at the age 18 on November 8, 2008, against Italy in Padova and appeared destined for a long Test career.

He was one of Australia's key players in the 2011 World Cup in New Zealand and had an instrumental role in helping the Wallabies qualify for the semi-finals.

But then his career trajectory fell with a number of off-field incidents, most critical being in 2013 when he was stopped from boarding an international flight from Perth because of disorderly behaviour and he was cut from the Wallabies altogether.

The incident followed Australia's Rugby Championship win over Argentina in Perth on September 14 after which the Wallabies, then coached by Ewen McKenzie, had two Tests to play in the Four Nation series.