Cardinal Angelo Scola appealed to parishioners for "unity" as he announced he was suspending Father Alberto Paolo Lesmo from his duties as parish priest in the Milan neighbourhood of Muggiano.
"Cardinal Scola and his colleagues express their distress and their pain, and pray for the victim, those close to him and for Father Lesmo," it said.
It said it had only recently learnt that the priest was the subject of a probe launched in 2013 as he had hidden it from his superiors.
The alleged abuse occurred between 2009 and 2011. The alleged victim, a cocaine addict, was a teen at the time and prostituted himself to fund his habit.
The archidiocese has opened its own investigation.
Child sex abuse scandals have dogged the Catholic Church in recent years with alleged victims breaking their silence in the United States, Ireland, the Netherlands, Australia France, Germany, Austria, Belgium, Canada, Mexico and Poland.
Pope Francis has approved the creation of an internal church tribunal to punish bishops who cover up sex abuse by priests, but networks of abuse survivors are sceptical that much will change.