Mulkearns, who died in April, was blamed for allowing paedophile priests to continue to operate in Victoria.
The late bishop left a reported $2.1m to be used by the current bishop of Ballarat for the benefit of the diocese “at his absolute discretion”, according to the Herald Sun.
Ballarat’s bishop, Paul Bird, said in a statement on Tuesday that the bequest would be used to help victims.
“Whatever the diocese of Ballarat receives from Bishop Mulkearns’ estate, I intend to set aside for assistance to victims of abuse,” Bird said. “This will continue the support that the diocese has given to abuse victims over many years.”
His office could not confirm the estate’s value or precisely how it would be used.
The child abuse royal commission heard Mulkearns knew paedophile priest Gerald Francis Ridsdale and others were sexually abusing children and moved them between parishes.
The commission also heard that he destroyed documents in Ridsdale’s file.
Mulkearns told the commission he was sorry and regretted not dealing with paedophile priests properly, saying he was trying to protect the church’s reputation and stop further offending.
Ballarat abuse survivor Andrew Collins said the proceeds should go to those hurt by the late bishop’s actions.
“His assets should be distributed to victims whose lives have been destroyed and damaged by his actions,” Collins told the Herald Sun before Bird’s announcement.