Archbishop Raymond Roussin, 69, said the ailment forced him to reassess his work.
"I believe my call is from God and to be a bishop, to be a pastor. I was unable to do it," Roussin said in an interview with Canadian Press, adding that he has suffered from depression for several years.
The Vatican said Pope Benedict XVI has agreed to the retirement of Roussin, who is stepping down more than five years earlier than the normal retirement age.
Archbishop J. Michael Miller, 62, was named to replace him, Roussin said.
"The archdiocese has been richly blessed by his ministry," said Miller, who is considered a specialist on the papacy and Catholic higher education.
Roussin was named in 2004 to lead the archdiocese, which included almost a half-million Catholics in western Canada, according to its Web site.
A year later he disclosed his depression in a letter to Catholics in Vancouver, explaining that he decided to be frank about his illness to help remove any stigma "wrongly" associated with the disease.
"It was a time that I just couldn't see clearly what I had done that was good, and I could not see anything clearly possible for the future. (I went public) to show it was not the destruction of my life, although it could have been," Roussin said.
The community responded to his letter with support.
In an effort to discuss and better understand depression, the Vatican's Pontifical Council for Health Pastoral care held an international conference on the topic in 2003.
Pope John Paul II told conference attendees, "The spread of depressive states has become disturbing," and he thanked those who help people cope with the disease.
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(Source: AP)