The inquiry, led by the former Federal Court judge Anthony Whitlam, will not hold public hearings, although its final report will be made public, the church said last Monday morning.
The former priest, known only as Father F for legal reasons, is alleged to have abused a number of altar boys while working in the Dioceses of Armidale and Parramatta during the 1980s.
In a statement outlining the inquiry's terms of reference, the church confirmed Mr Whitlam would investigate "information related to the 1992 meeting" when Father F allegedly confessed to abusing five young boys.
The three senior clerics who attended that meeting did not report the matter to police, and have since given conflicting accounts of what was said.