Tebartz-van Elst was suspended by Pope Francis as Bishop of Limburg in Hesse in October last year and resigned in March following a string of revelations about spending on his new headquarters.
The lavish project included €213,000 spent on a fish tank, €20,000 on light switches and €350,000 on wardrobes.
A report into the huge sums spent was published in March, but the 54-year-old has continued to live in the luxurious surroundings of his Limburg home, while the church tries to find a new role for him.
But in a statement on Tuesday, the diocese of Limburg said the problem of what to do with Tebartz-van Elst had been solved. He will move in September to a rented apartment in Regensburg until he takes up a new role.
Bishop of Regensburg Rudolf Voderholzer has assured him a “fraternal welcome and hospitality”, the Limburg diocese said.
“The diocese welcomes the solution found privately by Bishop Franz-Peter van Elst Tebartz and his family, which is a good step for a new beginning," it added.
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