The fullback was originally named on the extended bench for a return to Craig Bellamy's side after not playing since Round 9 through a hamstring tear and PCL injury which he sustained against the St George Illawarra Dragons, but the club have now confirmed he will miss this weekend.
The club released a statement confirming his absence.
"Ryan Papenhuyzen's return to the NRL will be delayed due to a positive COVID-19 test," the statement read.
"The fullback was named on the extended bench for Storm's Round 15 match with Brisbane on Friday night but will now have to spend seven days in isolation.
"Papenhuyzen returned a positive RAT yesterday which was confirmed by a positive PCR overnight.
"His replacement in the squad of 22 will be named later today."
It was reported earlier in the day by The Daily Telegraph's David Riccio on SEN Radio that New South Wales was "seriously interested" in how Papenhuyzen would have gone on Friday night, with the Blues set to announce their squad for Game 2 on Sunday night.
In a blow for the Blues, the 24-year-old will not get an opportunity to impress but may still be in the conversation for a shock selection following his return.
SEN's Andrew Voss said earlier today that he was "absolutely convinced" that Papenhuyzen would be a part of the Blues' squad even if he hadn't been selected in the final Storm team.
Game 2 will take place at Optus Stadium on June 26th, with Papenhuyzen set to come out of isolation early next week.