The move comes after revelations by Fairfax Media last month that a confidential church inquiry had found he had an improper sexual relationship with disabled woman Jennifer Herrick for 14 years in NSW.
As a result of the church inquiry, the priest was put on administrative leave for 16 months but was returned to active ministry in January.
His reinstatement was
criticised last month by Ms Herrick and victims' groups, especially in
light of a confidential letter from the church to her acknowledging
''the harm that can be caused to vulnerable people in such a case''.
In the past fortnight, senior church officials have intervened in the case and have had the priest removed, the Fairfax report added.
Church documents obtained by Fairfax Media reveal that the Archbishop of Melbourne Denis Hart has formally withdrawn the priest's "faculties to engage in any public ministry within the jurisdiction of the Archdiocese of Melbourne".
Archbishop Hart is understood to have received letters from concerned Catholic parishioners after the priest's reinstatement was made public.