Under the agreement, Bishop Thomas J. O'Brien acknowledged he concealed sex-abuse allegations against priests, Maricopa County Attorney Rick Romley said Monday.
Romley also announced new criminal indictments of six priests in the Phoenix diocese on charges involving sexual abuse of children.
Three of the priests were under arrest, Romley's office said. Two others were believed to be fugitive in Ireland and Mexico, while the sixth priest is now deceased.
O'Brien, the spiritual leader of 430,000 Catholics in Arizona since 1981, signed the agreement May 3.
The deal guarantees him immunity from prosecution for any criminal cover-up, Romley said. As part of the agreement, O'Brien issued this public statement:
"I acknowledge that I allowed Roman Catholic priests under my supervision to work with minors after becoming aware of allegations of sexual misconduct.
I further acknowledge that priests who had allegations of sexual misconduct made against them were transferred to ministries without full disclosure to their supervisor or to the community in which they were assigned. I apologize and express regret for any misconduct, hardship, or harm caused to the victims of sexual misconduct by Roman Catholic priests assigned to the Diocese."
Romley said investigators had gathered enough evidence to indict the bishop on obstruction of justice charges. Romley said, however, that the deal had achieved prosecutors' primary objective.
"In my primary objective, I have to do something to protect the children in the future," Romley said. "This has to change. I had to force a change and that's what I'm trying to do with this."
Romley added that he had not found any evidence that O'Brien himself had molested any children.
The deal is extraordinary — both as a personal statement of wrongdoing and as an agreement between a church leader and civil authority that changes how a diocese does business.
The deal was first reported Monday by The Arizona Republic.
At least a dozen grand juries have been convened nationwide in the past 18 months to investigate how the church handled sex abuse claims. A few priests, but no bishops and no dioceses, have been indicted. Some of the panels, however, issued scathing reports accusing dioceses of sheltering predators from law enforcement authorities.
The only deal that comes close to the one in Arizona was last December in New Hampshire. There, Manchester Bishop John McCormack publicly acknowledged his diocese would have been convicted of failing to protect children from offenders if prosecutors had gone to court. If he had not signed the agreement, his diocese would have been the first in the nation to face criminal charges.
In December, O'Brien disclosed that at least 50 priests, former priests and church employees had been accused of sexual misconduct with minors in the Phoenix Diocese over the past three decades. He declined to identify many of them, and denied their actions were covered up.
Under the deal with prosecutors, O'Brien agreed to appoint a moderator of the Curia, the church's equivalent of a chief of staff, who will oversee day-to-day administration of the diocese.
The bishop will no longer deal with sex abuse allegations against clergy. Instead, a new independent special advocate will handle the complaints, according to the deal. If the bishop interferes, he can be prosecuted.
In addition, the diocese will pay for counseling the victims.
"If all of the terms of this agreement are not fully carried out, I have the right to go back to court and declare this agreement is null and void," Romley said.
While the deal is unprecedented, it is well within church law and more palatable to the Vatican than if O'Brien had resigned, said the Rev. Thomas Reese, editor of the Jesuit magazine America.
Bishops often delegate authority to a chief of staff. But the Vatican would consider a bishop stepping down under pressure from a prosecutor as a violation of the church's independence, Reese said.
"There is the fear of the domino effect," Reese said.
The effect on lawsuits against the diocese depends on the evidence released as part of the agreement, such as details of the cover-up, lawyers on both sides of the issue said.
Five American bishops have resigned since January 2002 in connection with the scandal, which erupted in the Boston. Among them was Cardinal Bernard Law, who stepped down as archbishop of Boston after being condemned for letting priests go unpunished.