The player had signed a one-year deal for the 2015 season just this month, but told the club he wanted to be released just a week after signing.
He now looks set to return to Keighley Cougars.
“We have been having regular dialogue with the RFL, Keighley Cougars & James himself over his request to be released and thankfully we have agreed a compensation package with James himself paying an undisclosed fee to be granted his release,” said Hunslet’s director of rugby Darren Williams.
“We have also agreed to play Keighley in a pre season game ahead of 2016 which will also provide us with some financial recompense.
“It’s been a very disappointing saga in all honesty but at least all parties concerned can now move on from this and put this to bed. James is now expected to rejoin Keighley Cougars in Championship 1 for 2015.”