Nicaraguan President Daniel Ortega has ordered the closure of the Vatican Embassy in Managua and that of the Nicaraguan Embassy to the Vatican in Rome, a senior Vatican source said on Sunday.
Nicaragua signalled that the move, which came a few days after Pope Francis compared the Nicaraguan government to a dictatorship, was "a suspension" of diplomatic relations.
The Vatican source said that while the closures do not automatically mean a total break of relations between Managua and the Holy See, they are serious steps towards that possibility.
Ortega's administration has been increasingly isolated internationally since he began cracking down heavily on dissent following street protests that erupted in 2018. Ortega called the protests an attempted coup against his government.
Bishop Rolando Alvarez, a vocal critic of Ortega, was sentenced to more than 26 years in prison in Nicaragua last month on charges that included treason, undermining national integrity and spreading false news.
Alvazez was convicted after he refused to leave the country along with 200 political prisoners released by Ortega's government and sent to the United States. Alvarez refused to board the plane and was stripped of his citizenship.
In an interview published last week with Latin American online news outlet Infobae ahead of Monday's 10th anniversary of his pontificate, the pope pointed to Alvarez's imprisonment and likened what was happening in Nicaragua to the "1917 Communist dictatorship or that of Hitler in 1935".
Staff in both embassies had been down to barebones for years with only a chargé d'affaires for the Vatican in Managua and almost no one for Nicaragua in Rome.
The relationship between the Nicaraguan Catholic Church and the government has been severely strained since the crackdown on the anti-government protests in 2018, when the Church acted as a mediator between both sides.
The Church had called for justice for more than 360 people who died during the unrest.
Nicaraguan Bishop Silvio Baez, also a critic of the government, went into exile in 2019.
A year ago, the Vatican protested to Nicaragua over the effective expulsion of its ambassador, saying the unilateral action was unjustified and incomprehensible.
Archbishop Waldemar Sommertag, who had been critical of Nicaragua's slide away from democracy, had to leave the country suddenly after the government withdrew its approval of the envoy.