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Pope Benedict XVI has accepted the resignation of Bishop Daniel Walsh, who in his 11-year tenure brought stability to the Santa Rosa Diocese after years of financial and sex scandals only to see a troubled priest flee and money woes return in recent years.

Walsh, 73, took over as bishop in April 2000 and has shared duties since January with his successor, Bishop Robert F. Vasa, formerly of the Baker diocese in Oregon.

On Thursday, Walsh moved back to the priest house at St. Anne of the Sunset Catholic Church in his native San Francisco, where he held his first communion, confirmation and Mass.

Walsh had been asking the Vatican to let him retire since 2008.

"I felt that I had accomplished everything that I could in the diocese," he said. "We put in place, in a very strong way, the Charter for the Protection of Children and Young People, and stabilized the finances with accountability and transparency."

Walsh came to the Santa Rosa Diocese to clean house a year after former Bishop G. Patrick Ziemann resigned in disgrace, admitting his sexual relationship with another priest and leaving the diocese $16 million in debt.

But Walsh's work in stabilizing the diocese took a step backward in 2006 when his office failed to immediately report alleged sexual misconduct by former Sonoma priest Francisco Xavier Ochoa. Ochoa fled to Mexico before being charged with sex abuse of several children from different Sonoma County families.

After an investigation by the Sonoma County District Attorney's Office, Walsh accepted diversion to a counseling program in lieu of facing misdemeanor charges for the delay.

A lawsuit by Ochoa's victims cost the diocese $5 million in a subsequent settlement and became a public relations black eye for Walsh.

"It was very disappointing that people read my motives very falsely," he said. "Being accused of harboring a child pedophile is not a happy thing to come at you."

Walsh said he hopes that Ochoa's death in 2009, which was confirmed by local authorities earlier this year, "brings peace of mind to his victims."

Walsh pointed to accomplishments that include establishing a diocesan finance council that has brought greater transparency and accountability; bolstering the office of vocations; ordaining more than a half dozen priests and helping bring six seminarians to the diocese.

"I'm very proud that I've appointed five Hispanic pastors and reinstated the deacon formation program," Walsh said, adding that his 11 years in Santa Rosa Diocese "was a moment of great growth for me.<TH>.<TH>. deepening in my faith and reliance on God.

Walsh said he first asked the Vatican to allow him to retire in 2008, saying he was "exhausted" and that he thought Santa Rosa should have a younger bishop. Rome declined at the time, but Walsh said his request remained on file.

"I was very tired and I wrote to the Holy Father asking if I could retire early, which is not unusual," he said. "I felt the diocese needed a younger bishop who could travel and make the trips throughout the diocese."

The diocese of more than 150,000 Catholics stretches from Sonoma County to the Oregon border.

Yvette Fallandy of Santa Rosa, a St. Eugene's parishioner, said that Walsh advised members of his lay advisory council in April that Thursday would be his last day as bishop. Walsh celebrated his farewell Mass at St. Eugene Cathedral on Sunday.

"I am happy for him," Fallandy said. "He surely will be missed."

Fallandy, a former lay adviser to Walsh, said the bishop took the Santa Rosa diocese through a difficult period. "He did not have any easy time here," she said.

Last November, Walsh was advised by church officials in Washington that he could request a successor, with the church title of coadjutor, as a first step toward retirement. On Jan. 11, Walsh said he was advised Vasa had been selected.

In January, Walsh said the diocese's finances remained "very fragile." He has recommended Vasa launch another capital campaign in 2012 to help pay off diocese debts and support various programs.

He said the $5 million debt is still outstanding and that once Vasa gets his "sea legs" he will have to decide if such a campaign is in order.

Vasa, who was born in Lincoln, Neb., studied for the priesthood at St. Thomas Seminary in Denver and Holy Trinity Seminary in Dallas. He was ordained a priest for the Diocese of Lincoln, Neb. in 1976. In 1995, Pope John Paul II named him a "Prelate of Honor" with the title of "Monsignor." He was appointed bishop of Baker, Ore., on Nov. 19, 1999.

Vasa holds a master of divinity degree from Holy Trinity Seminary and a licentiate in canon law from the Gregorian University in Rome.

Fallandy said she appreciated Vasa's low profile over the past six months.

"Vasa never intruded in any way," she said.

Walsh was born in San Francisco. He was named auxiliary bishop of San Francisco in 1981 and bishop of Nevada. In 1995, Pope John Paul II created two new dioceses — the Diocese of Las Vegas and the Diocese of Reno — and Walsh was named to head the Las Vegas diocese.

He said he was looking to returning to St. Anne of the Sunset, where he will conduct Mass as "retired priest in residence."

"I'm very happy to be retired and get on to a new phase in my life and get back to parish work," he said, "which is what I was ordained to do."