Walsh was given a 'move on direction' to leave an area near Caville Avenue, with officers finding him still at the location 45 minutes later.
The 19-year-old was then handcuffed and led away by police where it was found he was in possession of cocaine.
Walsh fronted the Warriors' fans via video on Sunday afternoon to admit to having the drugs and apologise for his actions.
'I was told by some officers last night to move on. I didn't move on and that led to me getting arrested and taken back to the police station,' Walsh said.
'Once I got back to the police station I was searched and I was in possession of a small bag of cocaine, which I had some of during the night.
'No one else is involved in this. It's solely on me and I put my hand up. I should never have done it. It's a mistake that I've made, I'm aware of that and I'm really remorseful.'
NRL star Reece Walsh has been arrested in the Gold Coast with footage emerging of the 19-year-old being led away by police
Walsh capped an incredible rookie season that included playing State of Origin for Queensland by winning the Rookie of the Year award
Walsh appeared alongside Warriors CEO Cameron George who said the incident was a 'one-off' and that they would support the young star through the process.
'It's a stupid decision made by an inexperienced person. He is now fully briefed and aware of the situation and what impact it has on the broader community, which we completely apologise for,' George said.
'It is a one-off. We work tremendously well with our playing group and staff around awareness of drugs and alcohol and the impact it can have in a negative sense.
'Reece wanted to put his hand up and own the situation. We as a club support that approach.
'It's important for us to come here today, put our hand up and deal with it. Now we get on with supporting Reece through this process.'
The 19-year-old has previously spoken about his mother's battle with drug addiction, and admitted he hasn't seen her since he was 14.
After having his first child aged 18, Walsh said that he would never use drugs after learning the lessons