"I renounce my ministry," Aleksander Radler, 68, told Swedish daily Dagen. "My work for God, on the one hand, and the dark memories, on the other, are of course incompatible with the Christian message."
Radler, an Austrian, arrived in Sweden in the late 1960s after studying theology in East Germany, where he says he was recruited by the Stasi.
His confession comes six days after a lawyer for a Lutheran parish said a church investigation had found Radler was a Stasi agent. The probe found that Radler had, among other things, denounced students planning to escape from East Germany in 1968.
The investigation followed a 2011 book on the Stasi by Swedish researcher Birgitta Almgren that named Radler as an agent.
Dagen reported that the church had obtained East German archives that named Radler as an "elite spy", the highest rank given to Stasi informers working abroad.
"I should have listened to my internal moral compass and broken my ties with the forces of destruction, even if the social and academic cost would have been high," Radler said.
"Instead, I let the collaboration continue until the end of the 1980s."
The newspaper said Radler, who worked in a parish in the northern town of Burtraesk, had been tasked with passing on information about the church.
The pastor was even elected to local government for the Christian Democrats, one of four parties that currently hold power in Sweden in a centre-right coalition.
Another party official, Therese Engdahl, told the newspaper: "It's hard to understand. If he admitted in cold blood to having done this, then he's not the man I knew."