Bishop Walter Mixa of Augsburg said in his resignation letter last month that his diocese needed a "new start".
The bishop at first denied hitting children at an orphanage in the 1970s and 1980s, but later apologised.
He has not been accused of any sexual abuse. However, on Friday prosecutors said they were investigating other allegations but gave no details.
The Catholic Church has come under severe pressure over child sexual abuse allegations emerging across the world in recent weeks.
'Causing grief'
A short, Vatican announcement on Saturday cited no reason for accepting Bishop Mixa's resignation.
The Church has also set up an investigation into alleged financial irregularities at a children's home which was under Bishop Mixa's responsibility, amid reports that large sums of money had been spent on antique paintings, garden furniture and wine.
After denying the accusations of abuse for weeks, Bishop Mixa issued an apology, saying he was "sorry for causing many people grief", without elaborating.
Then, in his letter to the Pope, he asked for the forgiveness "of all those to whom I may have been unfair and to those who I may have caused heartache".
He said he was "fully aware" of his own "weaknesses".
On Friday, the Augsburg diocese said in a statement it had provided information to prosecutors over allegations involving the bishop, but declined to give details.
Prosecutors would only confirm that a preliminary investigation against the bishop had been launched."
Source: http://news.bbc.co.uk/2/hi/europe/8669747.stm
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