In a letter to parishioners, David Gréa, 46, said he was disappointed in the decision, adding that he "wanted to be in truth with the Church by stating my joy in being a priest and my wish to get married."
The former priest had served in a parish in Lyon for six years during which Mass attendance reportedly increased after he helped modernise the services.
Cardinal Philippe Barbarin, the Archbishop of Lyon, relinquished the priest of his duties after Gréa told him he had begun a relationship with a woman.
According to the Daily Telegraph, members of the congregation began to cry when the open letter was read out by the vicar general, Patrick Rollin, at Sunday Mass.
"This is a difficult time for our church," Gréa worte, "But let us keep in our hearts our Lord's appeal for us to overcome our bitterness, our resentment and our fears."
Clerical celibacy is a requirement in the Catholic Church. The vow for priests to practice celibacy was introduced in fourth century at The Council of Elvira.