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Wangaratta's Bishop David Farrer is to resign to take up a parish appointment in England.
After serving as bishop of the rural Victorian diocese for 10 years, he's to become the parish priest of St Nicholas parish in Arundel.
Diocesan registrar John Pryor said the announcement, made at the latest Bishop-in-Council meeting, was greeted with "surprise and shock".
The bishop will be farewelled on 31 May. It's planned he will then attend the Lambeth Bishops' Conference before his resignation formally takes effect in early August.
"It had not been his intention to resign and he always had the view that a bishop should return to his diocese from Lambeth," John Pryor said. However, the invitation from the parish in Arundel had arisen unexpectedly, he said.
Wangaratta's next diocesan synod is due to be held 23/24 May, where the members of the Bishopric Election Board are due to be elected. The board consists of 6 clergy and 6 lay Anglicans.