The hefty ban comes alongside a $30,000 fine to be donated to St Vincent's Hospital, representing the heaviest penalty ever handed down by the Roosters to a player.
The Roosters had trumpeted a strict anti-drug policy during the NRL pre-season, but after fronting the board on Thursday, Radley looks to have kept his job.
The star forward had been linked with an exit from the club where he made his NRL debut in 2017, with the London Broncos floated as a potential destination.
Smith appeared in Queensland's Southport Magistrates Court on Thursday, only days after text messages between the South Sydney hooker and Radley were leaked to the press.
Court documents show Smith is accused of unlawfully supplying Radley with cocaine at Currimundi, on Queensland's Sunshine Coast, on June 7.
While Radley has not been charged, the Roosters released a statement on Thursday afternoon saying he had brought the club into disrepute and had accepted their sanctions.
"I want to sincerely apologise to the club, my teammates, our sponsors, members and fans for the negative spotlight I have brought on the Roosters," Radley said in a club statement.
"I accept the sanctions in full and will work hard to earn back the trust and respect of everyone who supports this great club."
Radley will be unavailable for selection until at least round 11 next NRL season, depending on where the Roosters' byes fall in the draw.
The 27-year-old's unavailability looms as a blow to a Roosters side that will look to build on a 2025 campaign that ended with Saturday's elimination-final loss to Cronulla.
Radley remains tied to the Roosters through to 2027, on a contract worth a reported $750,000 per season.
The door appears to be open for Radley to represent England in the post-season Ashes series if selected by coach Shaun Wane.
The sanctions are strictly imposed by the Roosters, who have not yet formally told Radley he must make himself unavailable as part of his punishment.
News of the penalty comes after Roosters chairman Nick Politis told News Corp in January the club would sack any player caught taking drugs.
"My view is if somebody's caught doing cocaine or leaning over snorting something, we're going to get rid of them," Politis said at the time.
Local junior Radley has become synonymous with the Roosters across 161 first-grade appearances.
He was a member of their 2018 and 2019 grand final-winning sides and has become known for his physical approach to the game.
Smith has been ordered not to contact Radley as part of his bail conditions.
He intends to fight charges of supplying a dangerous drug and using or disclosing inside knowledge for betting.
