Carlton announced Duigan's retirement on Monday after receiving AFL permission to place the defender, who is contracted for 2014 but battling a degenerative knee, on its long-term injury list next season.
The AFL's decision means the Blues can elevate a rookie to replace Duigan, 29, on its senior list next season.
But an AFL spokesman told AFL.com.au Duigan won't be able to play in a state league or local competition next year as long as he remains on the Blues' long term injury list.
"The only way he could play in another competition is if Carlton decided to pay out his contract midway through the year," the spokesman said.
A Carlton spokesperson told AFL.com.au the club had yet to decide whether it would terminate Duigan's contract before the end of next season.
The Blues are yet to place Duigan on their long-term injury list, but when they do he will have to remain there for at least eight weeks.
A club can put players on its long-term injury list during the pre-season, but this is rare given rookies can play in pre-season games without being elevated from the senior list.
Duigan approached the Blues about retiring soon after returning to pre-season training last month, realising he could not carry his knee through another AFL season.
By that time, the list lodgement deadline that would have allowed Carlton to replace Duigan at the national or pre-season drafts, or with a free agent, had already passed.
Duigan played 43 games in three seasons with the Blues after being a surprise mature-age selection in the 2010 NAB AFL Draft at pick 70.
Twitter: @AFL_Nick.
