Nawaqanitawase's defection is a major blow for Australian rugby union, denying the Wallabies of one of their most exciting outside backs for the British and Irish Lions tour in 2025.
"We are disappointed – Mark has been a strong player over the last 12 months," Rugby Australia CEO Phil Waugh said in a statement on Thursday.
"However, the outside backs are a position of strength for us, with great depth coming through."
The Wallabies have lured a number of rugby league converts over the years while losing comparatively few players to the rival, 13-man game.
Dual code international Mat Rogers was the last incumbent Wallaby to return to the National Rugby League (NRL) with the Gold Coast Titans in 2007.
Through a dismal Wallabies season which included a first group stage exit at the World Cup in France, Nawaqanitawase was one of the few shining lights, thrilling fans with his explosive running and aerial prowess under the high ball.
"At 23, Mark feels now is the best time to stay in Australia, but have a new experience in the Roosters program for 2025 and 2026," his agent told Australian media.
"We hope the door will be open for Mark to return to the Wallabies fold in the future."
His defection caps a miserable year for Rugby Australia, which in recent weeks has suffered board upheaval, a revolt by state member unions and worn the blame for Eddie Jones's failure as Wallabies coach.