Los Angeles Archbishop Jose Gomez said Thursday Auxiliary Bishop Thomas J. Curry, who worked with Mahony to conceal abusers from police in the 1980s, resigned his post as a regional bishop in Santa Barbara, the Los Angeles Times reported.
The announcement came as the church website posted tens of thousands of pages of previously secret personnel files for 122 priests accused of molesting children.
"I find these files to be brutal and painful reading. The behavior described in these files is terribly sad and evil," Gomez wrote in a letter.
"I cannot undo the failings of the past that we find in these pages. Reading these files, reflecting on the wounds that were caused has been the saddest experience I've had since becoming your archbishop in 2011," Gomez wrote.
Archdiocese spokesman Tod Tamberg said Mahony's day-to-day life as a retired priest would be largely unchanged. He resides at a North Hollywood parish, and Tamberg said he would remain a "priest in good standing" who could celebrate mass.
The files of 14 clerics accused of abuse, made public in a court case Monday, spelled out -- in Mahony and Curry's own words -- how church officials plotted to keep law enforcement from learning priests molested children, the Times said.
To fend off investigations, Mahony and Curry gave priests they knew had abused children out-of-state assignments and prevented them from seeing healthcare professionals who might alert law enforcement authorities.
Mahony and Curry both issued apologies, with the cardinal saying he didn't realized the depth of harm done to children until he met with victims during civil litigation.
The archdiocese released the files hours after Los Angeles County Superior Court Judge Emilie H. Elias ordered the church to do so.
Previously released records indicated Mahony and Curry discussed how to cover up child molestation from law enforcement 15 years before the clergy sex-abuse scandal came to light.
Those files are available to the public at tinyurl.com/clergyfiles.
The files Elias ordered released late Thursday are the last step in a landmark $660 million settlement between the archdiocese and about 500 people who accused members of the clergy of abusing them, the Times said.
Victims said the files would make church leaders be accountable for letting pedophiles remain in the ministry. Law enforcement officials said the records would be important investigative tools, the Times said.