The bishops announced at the end of an emergency summit with Pope Francis that all 31 active bishops and three retired ones in Rome had signed a document offering to resign and putting their fate in the hands of the Pope.
Francis can accept the resignations one by one, reject them or delay a decision.
It is the first known time an entire national bishops conference has offered to resign en masse over scandal, and laid bare the devastation the abuse crisis has caused the Catholic Church in Chile and beyond.
Calls had mounted for resignations after details emerged of the contents of a 2,300-page Vatican report into the Chilean scandal leaked early on Friday.
Francis had accused the bishops of destroying evidence of sex crimes, pressuring investigators to minimise abuse accusations and showing "grave negligence" in protecting children from paedophile priests.
In one of the most damning documents from the Vatican, Francis said the entire Chilean church hierarchy was collectively responsible for "grave defects" in handling cases and the resulting loss of credibility for the Catholic Church.
"No one can exempt himself and place the problem on the shoulders of the others," Francis wrote in the document, published by Chilean T13 television and confirmed as accurate by the Vatican.
In a statement in response, the Chilean bishops said the contents of the document were "absolutely deplorable" and showed an "unacceptable abuse of power and conscience", as well as sexual abuse.
They asked forgiveness from the victims, the Pope and all Catholics and vowed to repair the damage.
Francis summoned the entire bishops' conference to Rome after admitting he had made "grave errors in judgment" in the case of Bishop Juan Barros, who is accused by victims of Chilean priest the Rev Fernando Karadima of witnessing and ignoring their abuse.
The scandal grew beyond the Barros case after Francis received the report written by two Vatican sex crimes experts sent to Chile to get a handle on the scope of the problem.
Their report has not been made public, but Francis cited its core findings in the footnotes of the document he handed to the bishops at the start of their summit this week.
Francis said the investigation showed "grave defects" in the way abuse cases were handled, with superficial investigations or no investigation at all of allegations that contained obvious evidence of crimes.
The result, he said, "created a scandal for those who denounced them and all those who know the alleged victims".
In other cases, there was "grave negligence" in protecting children from paedophiles by bishops and religious superiors - a reference to the many cases of sexual abuse in recent years within Chilean religious orders, including the Salesians, Franciscans and the Marist Brothers community.
Some of these religious order priests and brothers were expelled from their congregations because of immoral conduct, but had their cases "minimised of the absolute gravity of their criminal acts, attributing to them mere weakness or moral lapses", Francis wrote.
Those same people "were then welcomed into other dioceses, in an obviously imprudent way, and given diocesan or parish jobs that gave them daily contact with minors", he said.
Such behaviour has been the hallmark of the clerical sex abuse crisis worldwide, with bishops and religious superiors shuttling abusers from parish to parish or dioceses rather than reporting them to police or launching canonical investigations and removing them from ministry.
Francis said he was "perplexed and ashamed" by the report's evidence that there were "pressures exercised" on church officials tasked with investigating sex crimes, "including the destruction of compromising documents on the part of those in charge of ecclesiastic archives".
He said such behaviour showed "an absolute lack of respect for the canonical process and worse, reprehensible practices that must be avoided in the future".
He said the problem was not limited to a group of people, but could be traced to the training Chilean priests received in seminary, blaming the "profound fracture" within the church on the seminaries themselves.
The Vatican investigation, he said, contained "grave accusations against some bishops and superiors who sent to these educational institutions priests suspected of active homosexuality".
The harsh assessment of the quality of seminaries suggests a possible next step might be a full-on Vatican investigation of Chilean schools of priestly training.
Pope Benedict XVI ordered such an investigation into Irish seminaries after he convened the entire Irish bishops' conference for a similar dressing-down in 2010 over their handling of abuse cases.
"The problems inside the church community can't be solved just by dealing with individual cases and reducing them to the removal of people, though this - and I say so clearly - has to be done," Francis wrote.
"But it's not enough, we have to go beyond that. It would be irresponsible on our part to not look deeply into the roots and the structures that allowed these concrete events to occur and perpetuate."
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