Francis had ordered an investigation into the allegations against Tegulcigalpa Auxiliary Bishop Juan José Pineda Fasquelle last year. On Friday, the Vatican said Francis had accepted Pineda's resignation.
No explanation was given. At 57, Pineda is well below the normal retirement age of 75 for bishops.
Pineda was the top deputy to Cardinal Oscar Rodriguez Maradiaga, one of Francis' main cardinal advisers, and his downfall is a blow to the Honduran archbishop.
Maradiaga had frequently left the archdiocese in Pineda's care due to his obligations as a member of Francis' kitchen cabinet, and poor health that has forced him to seek medical treatment overseas.
The Vatican investigation had focused on both sexual misconduct allegations against Pineda and financial mismanagement charges against Maradiaga.
Francis has stood by Maradiaga's assertion of innocence on the financial improprieties charges.
According to reports in the Italian newsmagazine L'Espresso, Pinedo was known to have had intimate relations with several men, including some favorites whom he bestowed with gifts. Several seminarians reported his attempted advances.
It's the latest in a series of cases of high-profile prelates being brought down because of inappropriate sexual relations with adults under their authority.
Most recently, one of the most highly respected American cardinals, Theodore McCarrick was removed from public ministry following revelations he sexually abused both minors and adults.
The archbishop of Paris recently sanctioned a well-known French priest and psychotherapist after several male patients accused him of sexual improprieties during therapy. The Rev. Tony Anatrella was considered such an expert in homosexuality and gender studies that he was an adviser to two Vatican offices. He is appealing the reprimand that he cease all public ministry.
And in Chile, where all 31 active bishops offered to resign this spring over their botched handling of cases sexual abuse against children, recent revelations have uncovered networks of sexually active gay priests and the complicit bishops who protected them.
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