Fr John Walshe has resigned from his position at the Mentone-Parkdale parish in Melbourne's southeast, reports The Age."I have this week, with the agreement of the Archbishop, submitted my resignation from the office of parish priest of the Parish of Mentone-Parkdale," he said in the statement.
"This will take effect from 18 January, 2017.
"I wanted to communicate this to you as soon as possible. When I leave early next year I will be four days short of having completed 25 years in the parish. It has been my immense honour to have been with you for this time."
Fairfax Media understands Fr Walshe will not continue his services at another parish and will instead pursue further study.
He came under fire last year after he testified on behalf of Cardinal George Pell at the sexual abuse royal commission.
His appearance prompted a former student priest, John Roach, to reveal he was sexually abused by Fr Walshe in 1982.
In 2012, the Melbourne Archdiocese's Independent Commissioner accepted Fr Walshe had sexually abused the then 18-year-old seminarian and paid him $75,000 in compensation, the maximum available under the Melbourne Response scheme.