CARLTON has been forced to end its alignment with its VFL affiliate the Northern Blues as the ongoing financial implications of the League's COVID-19 shutdown continues to wreak havoc.

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The club has also parted ways with VFL coach Josh Fraser as a result of the situation, with the former Collingwood and Gold Coast ruckman holding a dual role with the club for the last five years.

The Blues, who were understood to be distraught at being forced into making the decision to cut ties with Northern, had been placing a growing emphasis on the strength of their VFL affiliate in recent years.

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The club had ensured an increased focus on improving recruitment strategies, which had seen it sign former AFL players such as Alex Johnson, Jono O'Rourke, Josh Hill, Kieran Collins, Jordan Cunico and Lukas Webb in recent years.

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However, an AFL directive for clubs to cut soft cap expenditure by $3 million in the next year as a result of the COVID-19 crisis meant Carlton was forced to reassess whether it could sustain the costs involved within its alignment with the Northern Blues.

The club now appears likely to move to a standalone VFL side when state-leagues resume competition, which is not expected until May 31 at the earliest.

Carlton officially aligned with the then-named Northern Bullants in 2003, with is current senior coach David Teague beginning his coaching journey with a three-year spell at the helm of the VFL side between 2008 and 2010.

The decision means that the Northern Blues, which was first formed as the Preston Football Club, will now essentially cease to exist after 138 years in competition.

"It is hard to put into words how difficult a decision this has been," Carlton CEO Cain Liddle said in a statement.

"Northern have been part of the Carlton family for the last 19 years. While being an incredibly proud club in their own right, they have also provided a terrific pathway for our players and coaches to thrive in their development.

"Preston City Oval was a second home on the weekends for many Carlton players, staff and supporters. This is an extremely sad day for so many involved but Northern will always have a special place in the history of the Carlton Football Club.

"We are currently working with Northern Blues players to ensure they have access to ongoing support and resources. Should the VFL season go ahead, Carlton will be offered the opportunity to enter a team of our own and we would obviously be leaning heavily on existing Northern Blues players to complement our listed players."