Jones, who admitted taking testosterone, underwent his first test last month and a second on 18 September, both carried out by the Sports Council of Great Britain on behalf of the Welsh Rugby Union.
A spokesman for the WRU said: "We deplore the use of banned substances and will take the appropriate action under the International Rugby Board rules and regulations. Hopefully this episode will deter any other athlete from experimenting with performance-enhancing drugs."
The first Welsh player to test positive for steroids was former South Wales Police centre Richie Griffiths in 1990 after a Division One game against Aberavon.
Stuart Gallagher, the Llanelli chairman, said: "We want to stamp out the use of drugs in sport and we asked our playing staff to volunteer for tests.
"Paul Jones volunteered information that he had been taking anabolic steroids. He was tested and then asked not to train or come to the club until such time that the IRB rules had been complied with. Paul was also made aware that the club in no way condones what was done. Paul deeply regrets his mistake and the club look forward to him returning."