A statement sent to AFL.com.au from Croad's management on Tuesday night said the 32-year-old had been "grossly defamed and the subject of reprehensible defamation" in a front-page story published in The Age newspaper.
The report claimed Croad, an All Australian and Hawthorn premiership player, had been scrutinised by the Australian Crime Commission as part of its investigation into drugs and organised crime in sport.
Croad's management responded at 7pm AEDT after seeking legal advice.
"We have taken urgent high level advice in respect of the front-page story published by The Age on 12 February 2013," the statement read.
"That legal advice has confirmed that Trent has been grossly defamed and the subject of reprehensible defamation.
"Trent will now sue all involved in the publication and all repetitors of the false and defamatory allegations within this baseless story.
"On legal advice, Trent will not be able to add any further comment at this time."