Sydney FC have terminated Brazilian winger Douglas Costa's contract by mutual consent after the club said on Wednesday that the former international is trapped in his homeland by unresolved legal troubles and unable to return to Australia.

Marquee signing Costa had hoped to revive his career in Sydney when he signed a two-year deal last year but the 35-year-old former Brazil international has not played for the five-times A-League champions since May.

Despite Sydney's patience in granting Costa more than two months to sort out his affairs, the club said "on-going legal and personal matters" in Brazil had prevented him from leaving his home country.

Costa eventually told Sydney there was "no end in sight" to his predicament.

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