Greene, 20, and a 19-year-old Melbourne man have been hit with a raft of charges stemming from the alleged incident and the Giants have just released a statement confirming Greene was involved.
"The Greater Western Sydney Giants are aware of an incident involving player Toby Greene in Melbourne last night," the statement read.
"Greene has been charged by police in relation to the incident.
"The club is taking the matter very seriously and has no further comment to make at this stage."
When contacted by AFL.com.au, the venue where the incident occurred, Zagames, would only say they were assisting police with their investigation.
Following Sunday's 111-point defeat to West Coast in Perth, the GWS players had been granted leave due to this week's bye, with a number of them returning home to family in Melbourne.
They are not due back at the club until Friday.
Earlier, Police confirmed the charges to AFL.com.au, which include assault with a weapon and intentionally causing serious injury, saying they relate to an alleged incident involving a staff member.
"Police have charged a 20-year-old man and a 19-year-old teen following an alleged assault at a licences premises on Derby Road in Caulfield East last night," a police media spokesman confirmed.
"The man from Rozelle, along with the Malvern East teen, were arrested after allegedly assaulting a staff member.
"They have both been bailed by police to appear at Melbourne Magistrates Court on 25 September."
Greene has been charged with intentionally causing serious injury, recklessly causing injury, affray, assault in company, assault by kicking, assault with a weapon, unlawful assault, making threats to inflict serious injury, being drunk in a public place and criminal damage.
The teenager's charges include intentionally causing serious injury, affray, unlawful assault, making threats to inflict serious injury, being drunk in a public place and behaving in an offensive manner.
The alleged matter clearly looms as a significant setback for Greene, who had been performing strongly on the field so far this season.
Used predominantly in a tagging role, Greene beat Port Adelaide skipper Travis Boak in GWS' 35-point defeat two weeks ago before being named the Giants' best in Sunday's lopsided defeat to the Eagles.
It was a welcome return to form for a player that finished runner-up to Callan Ward in the Giants' best and fairest award in 2012, but failed to back that up in a disappointing season last year.
Suspended for one game for striking Adelaide's Richard Douglas in round five, Greene was averaging 25 disposals, four marks and 3.3 tackles per game through his seven appearances to date.