The pontiff invoked his "supreme" authority to stiffen an earlier sentence because of the "exceptional amount of damage" the priest's crimes had caused.
In a statement, the Vatican said Francis had laicised 88 year old Fernando Karadima, who was originally sanctioned in 2011 to live a lifetime of "penance and prayer".
Karadima had sexually abused minors in the Santiago parish he ran.
The Vatican said Francis (pictured below) was doing so for "the good of the church".
"It is without doubt an exceptional measure, but Karadima's grave crimes have caused exceptional damage in Chile," Vatican spokesman Greg Burke said.
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