The RSL is launching an investigation into claims raised at the charity's AGM that a former league president was given a $40,000 dollar car when he retired last year.
The current president Robert Dick and the vice-president Stewart Cameron have both stood aside while an independent investigation into the matter is carried out.
Rear Admiral Ken Doolan was the National President of the League from 2009 until 2016, and allegedly received the car and other items as a parting gift.
The RSL New South Wales President James Brown raised the allegations about the former president's retirement gift with the National Board on Friday.
"An allegation was brought to me yesterday concerning the possibility that a large gift had been made to a former officer of RSL National," he said.
"It appears there is a strong chance that did occur, but we've decided to make investigations to be absolutely certain."
The news comes at a difficult time for the charity.
The league's NSW branch is the subject of an unrelated public inquiry focusing on financial concerns, including an expenses scandal.
Just this week it heard explosive evidence about the expenses of the former state president Don Rowe, who spent hundreds of thousands of dollars on his corporate credit card, including more than $200,000 in cash withdrawals.
Some of that was spent on his mortgage and Christmas gifts, among other personal expenses.
Senior RSL figures 'gobsmacked' by gift allegation
Rear Admiral Doolan retired last year, and is not implicated in any way in the allegations of financial mismanagement in NSW.
But the gift allegation has reportedly left senior figures in the league "gobsmacked".
Mr Brown says an investigation will report back as soon as possible.
"At this stage, the president and the deputy national president have stood aside pending the outcome of that investigation … we have asked to have results back within a week," he said.
Mr Dick and Mr Cameron are both relatively new to their positions, but were on the board at the time the gift was allegedly given.
"To ensure that there's absolute integrity to the process of the RSL National Board, that decision was made," said Mr Brown.
The ABC has been unable to reach Rear Admiral Doolan for comment.
