Newcastle will be forced to find a new captain for 2021 after Mitchell Pearce stepped down from the role following a text messaging scandal involving an employee at the NRL club.
The 31-year-old halfback has met with club staff and told the Knights' playing group of his decision ahead of his return to pre-season training on Thursday morning.
In a statement, the Knights said Pearce had approached coach Adam O'Brien, chief executive Phil Gardner and head of football Danny Buderus to apologise for his behaviour and the distraction it had caused to the team.
He then met with the Knights' playing group to tell them he would be giving up the captaincy, which was already under scrutiny at the club.
"Pearce's decision followed a lengthy review of current issues, last season's performance and reflection upon the added pressure the captaincy brings to both his on-field performance and personal life. The club is fully supportive of his decision," the statement read.
"The Knights will continue work to develop a new club leadership model, with a decision on new club leaders - including who will ultimately perform the role of captain - yet to be made."
The Knights are desperate for success after making the finals for the first time in seven seasons in 2020 only to be bundled out in week one.
Pearce, a former State of Origin star, will address media on Thursday morning for the first time since his wedding to fiancee Kristen Scott was called off last month.
Further complicating the matter is speculation of a rift within the playing group, with senior players understood to be close friends with the long-term partner of the Knights staffer involved in the scandal.
The Knights, however, remain tight-lipped on the details of the situation.
"The Newcastle Knights are committed to respecting the privacy of their employees, including any discussion of private matters in the public domain," the statement said.
"At the conclusion of tomorrow's media opportunity, no further comment will be made on this matter."
The latest controversy comes at the worst possible time for Pearce who is in negotiations with the Knights to extend his contract beyond the end of the year.
A sticking point is believed to be money but his latest indiscretion will not do him any favours during the bargaining process.
Pearce was understood to have found stability at Newcastle with Scott following several controversies with the Sydney Roosters.
