The Dragons have released a statement after news broke on Wednesday that star player Taulupe Faletau had signed for Premiership side Bath.
Chief executive Stuart Davies described the transfer as "the worst possible outcome" as the Welsh international is set to leave Rodney Parade.
The Dragons were today notified by the player's agent that Faletau had signed for Bath, with the region revealing the news came after it seemed likely the number eight would pen a National Dual Contract and remain with the PRO12 outfit, for whom he has played for since 2009.
But in a statement from the Dragons, they revealed that: "There then followed a period where it was not known whether such a contract would be made available, in the last week or so negotiations have commenced between the Welsh Rugby Union and the player's agent on this matter."
A disappointed Davies said: "We welcomed Taulupe announcing his desire to stay at the Dragons, since he has consistently stated that he would not wish to play for any other Welsh region. Following the failed move to Bath this season, it was our sincere hope that negotiations with the Union would be concluded successfully and we would retain him with the support of a NDC. As such we were willing to support the negotiation process in whatever way was necessary.
"This is the worst possible outcome for us given all that has gone before, and it leaves us feeling extremely disappointed as well as significantly worse off financially.
"It remains the case that such is his professionalism that I have no concerns about Taulupe's contribution for the remainder of the season, and it goes without saying that he will always be welcome here after his departure. We will now consider how best to invest elsewhere the money set aside for Taulupe's next contract."