New South Wales halfback Adam Reynolds has been ruled out of State of Origin III, with Matt Moylan returning to the side as his replacement.

Reynolds succumbed to a shoulder injury initially suffered during Origin II after failing to train at the Blues' only training session so far on Wednesday morning. 

A pinched nerve in his neck related to the injury saw him ruled out by NSW team doctors in the end, after he returned in South Sydney's 20-0 loss to North Queensland over the weekend.

The NSWRL has confirmed Matt Moylan will rejoin the Blues squad as Reynolds' replacement.

Moylan played the first two Origins for NSW and his return to the fold for the Blues comes just two days after he was dropped for Wests Tigers fullback James Tedesco.

Moylan's role in the team is unclear with suggestions it won't be confirmed until one hour before kick-off on July 13.

He could be used off the bench, with Cronulla's Jack Bird starting in the halves in Reynolds' place.

Reynolds said being rubbed out of Origin III was one of the biggest disappointments of his career yet maintained it was in the best interests of the team.

"It's always hard missing out on games because Origin is special," Reynolds said.

"It was the highlight of my career. To sit out and not be able to take part is incredibly disappointing.

"I want to come back and join the side next year. I love being part of the camp and I have learnt a lot while I have been here.

"I am only going to grow from here and I look forward to getting another shot."