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The Dragons have declared they will hit the player market to replace Tyson Frizell after confirming the star back-rower will take up a lucrative three-year deal with Newcastle next season.

Both clubs have announced Frizell's acceptance of the Knights offer, believed to be worth around $700,000 a year from 2021, despite the uncertainty around when the competition returns and the salary cap.

The deal cannot be officially lodged as the NRL has advised player agents and clubs that all new deals will be put on hold during the negotiations between the NRL and RLPA over salaries during the competition hiatus caused by the global coronavirus pandemic.

Frizell posted on Instagram on Friday to announce his departure and also ask everyone to focus on staying safe amid the COVID-19 outbreak rather than his contract status. 

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Throughout extension talks the Dragons had always been confident they would keep Frizell, tabling what is believed to be the biggest contract put to a forward in the joint-venture's history.

Newcastle put in an offer in late January and the Dragons responded to match the Knights' offer with an improved three-year deal, which is understood to have had a 2023 option in Frizell's favour.

On Friday morning however, the club issued a statement to say Frizell had advised the club he had agreed to terms with another NRL club.

"Tyson Frizell received one of the most substantial offers in St George Illawarra history to remain at the club beyond the 2020 season," recruitment manager Ian Millward said.

"It was a deal that reflected his contribution over the past eight years, and of course, the seasons that would have followed.

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"We made responsible decisions when determining Tyson's value and contract extension.

"Tyson's decision to depart the Dragons at season's end will now allow the club to pursue other quality players in the marketplace."

Rugby league's marketplace is in its most uncertain state since the Super League war.

But should St George Illawarra target a like-for-like replacement in the form of a back-rower, Brisbane's David Fifita and Titans veteran Kevin Proctor are the only other representative edge forwards off contract in 2020.

Dragons lock Jack de Belin's contract also expires at the end of this season - he has not played since the start of last season due to being stood down while he faces sexual assault allegations. understands Frizell made the decision on his future last week while the competition was still in play.

But St George Illawarra officials are privately miffed about the timing of his call given the freeze on fixtures.

Newcastle also issued a statement on Friday to say their club "has and always will act in good faith in relation to contracts" and that "our offer has never changed and was issued prior to these trying and uncertain times".

When Newcastle's bid first became public at the NRL Nines, Frizell, 28, told reporters the chance to win a premiership rather than his pay packet would dictate where he plays next season.

"People know that I'm looking to win a premiership hopefully and play some good footy, play finals footy," he said last month.

"That's what we do it for. I don't do it to go chasing money, that's a nice part of it but if that's what driving us we're not going to be successful at all."

Frizell's exit is a hammer blow for the Dragons, with veteran teammate James Graham acknowledging the move is hardly an endorsement for the club's current stocks. 

"I don't disagree with him for saying that that's why he wants to play. That's what most of us would want to do," Graham said on Fox League.

"If Tyson's got his reasons for going to Newcastle, then that's fair enough. Obviously if he's choosing Newcastle over St George [Illawarra], then it's disappointing."

Paul McGregor's team already came into 2020 under the pump after last year's 15th-placed finish which was followed with back-to-back losses to Wests Tigers and Penrith before games were suspended.

Newcastle counterpart O'Brien meanwhile has made no secret of wanting to beef up his back-row with an elite edge runner.

With 14 Tests for Australia, another five for Wales and 11 NSW Origin appearances, Frizell ranks among the game's best forwards.

His arrival at the Knights next year will see him join Blues teammates Mitchell Pearce, David Klemmer and Daniel Saifiti, filling out O'Brien's back row alongside Lachlan Fitzgibbon and the recently re-signed Mitch Barnett.

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