Sam Warburton's central contract with the Welsh Rugby Union (WRU) could put other players in a very difficult position according to his former Wales team-mate Martyn Williams.
Flanker Warburton is the first player to sign such a deal in Wales.
Williams is pleased the Welsh captain is staying but he said on BBC Wales Scrum V: "It's a dangerous precedent.
"You're on dodgy ground when you're cherry picking players individually to centrally contract."
Williams is concerned about the impact the contract deal will have on player's like the Ospreys Justin Tipuric, who is competing with Warburton for a place in the Welsh back row.
"Put yourself in Tipuric's shoes," said Williams, "What's he thinking today?
"When a player comes to the end of his contract are you going to have a bidding war between the regions and the union for a player?
"Which leaves the player in a very difficult place."
Former Welsh international Jonathan Davies says the contract "opens a can of worms" and former England and British Lions centre Jeremy Guscott agrees.
"It is a strange situation but he's done it," said Guscott. "I suppose for Welsh rugby it's history in the making.
"But what are the other players going to think if they are not actually chosen out to get centrally contracted? Very dangerous."
Warburton's current contract with the Cardiff Blues expires in the summer and in December he set a deadline for his future to be sorted out.
Uncertainty over his club career came against the backdrop of the dispute between the Welsh Rugby Union and the four regions.
The two sides are in dispute over funding, proposed new competitions and the exodus of players to richer clubs in France and England.
The WRU says Warburton will be loaned back to the Cardiff Blues next season for free as part of the three-year deal.
Wales players have previously been contracted to their regions or teams and the regions had an agreement not to field a centrally-contracted player.
The Cardiff Blues have yet to respond to the news of Warburton's deal but the region's chairman Peter Thomas has claimed the Welsh regions and Welsh Rugby Union were in a "crazy" competition to sign Wales' top players.
Warburton's Cardiff Blues team-mate Leigh Halfpenny, 25, has become the latest player to join the Welsh exodus, with the full-back signing for French side Toulon on a two-year deal.
However fellow international Alun Wyn Jones will remain in Wales after the 28-year-old lock agreed a new two-year contract with the Ospreys.
Warburton's agent Derwyn Jones said 25-year-old Warburton turned down a move to French club Toulon in order to stay in Wales with the offer from the WRU the only viable solution.