The Cats had a secret arrangement, revealed in News Corp newspapers on Thursday morning, with an undisclosed player who signed the agreement in a bid to exonerate the club and its medical staff from future court action.
The deal with the unnamed footballer, who is still an active AFL player, was signed two years ago.
In a joint statement with the AFLPA, the AFL declined to penalise Geelong in any way, calling it a "complex and unique case".
"Geelong has advised the AFL today that the waiver in the letter will be removed, noting that the player continues to acknowledge potential risks," the statement read.
"The AFL is satisfied that the letter was not used by Geelong to allow a medically unfit player to return to play.
"The AFL and AFLPA will advise clubs that any proposed arrangements that impact on a player's legal rights and protections will be required to be notified to and approved by the AFL and the AFLPA."
Geelong also issued a statement on Thursday night, saying the club was "not attempting to vary the terms of the AFL standard playing contract, or attempting to avoid its responsibilities under health and safety laws."
"The club's focus throughout the process was providing care and support to the player, with the intention to give the player agency in the decision making process around their own playing career," Cats chief executive Steve Hocking said.
"The club always aims to ensure that players are provided with information to enable them to make informed decisions about their careers.
New AFL Commission chair Craig Drummond was the president of the Geelong board at the time the deal was struck.
Drummond was not mentioned in the statement from the AFL.
"Clubs cannot unilaterally contract out of their obligations under the CBA and Standard Playing Contract, nor attempt to avoid their responsibilities under health and safety laws," AFLPA boss James Gallagher said in a statement.
"Importantly, no player is permitted to return to play or train unless they have been deemed medically fit to do so.
"We are in discussions with AFL to better understand the circumstances of this case and ensure this issue is not replicated further at the elite level."
Melbourne coach and former Cats assistant Steven King, who spoke before Geelong were identified as the club in question, was asked about the report on Thursday morning.
"All I'll say about that is that, as a club and me personally, I'd never do anything or ask my players to put themselves at risk. Their health and safety is paramount," King said.
"... as a coach, my opinion is I'd never ask a player to put himself at risk to play, and those decisions are with our doctors and medical team, and that's where, as a coach, I leave them."
Former West Coast premiership coach Adam Simpson was in disbelief.
"From a coach's eye, it's hard to really fathom how you would get to the conclusion that this is a good thing to do. And how it goes up the chain?" Simpson told SEN.
"From a father point of view and a coach point of view, I can't see how you would accept that is the right thing to do for your son or your player."
Concussion and head trauma is one of the most pressing issues facing the AFL.
Multiple players, including former Melbourne star Angus Brayshaw, champion West Coast defender Jeremy McGovern and premiership Magpie Nathan Murphy, were forced into retirement due to repeated concussions.
Several deceased players, including Danny Frawley and Shane Tuck, were posthumously diagnosed with degenerative brain disease Chronic Traumatic Encephalopathy (CTE).
There is also a multimillion-dollar concussion class action case against the AFL, led by former Geelong defender Max Rooke, in the Supreme Court of Victoria that is set to go to trial next year.
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