Auditing whizz Libero Milone, 68, handed in his notice Monday and the pope accepted it, thereby “concluding the collaboration”, the Vatican said on Tuesday in a short statement.
The hunt was now on for someone to replace him, it added.
Milone was hired to much fanfare in 2015. Vatican officials said he would be “completely independent” and would have the power to look through the books of every department in the tiny city state, reporting only to the pope.
- Four cardinals are challenging Pope Francis' authority over a reforms row
- Two ex-bank chiefs at the Vatican handed prison terms over 'dubious' transactions
- Rome's police are on the hunt for unknown anti-pope plotters
But the accountant, who spent much of his career with the audit firm Deloitte & Touche, is reported to have clashed with the Vatican bureaucracy. A break-in to his personal computer and office in late 2015 was taken as a sign he was ruffling feathers.
Religious experts said his departure was a blow to Cardinal George Pell, prefect of the Vatican's economy secretariat, who has also been meeting fierce resistance to his reform efforts.
Pope Francis was elected in 2013 on a mandate to clean up the scandal-hit Vatican, including its financial house. It was he who created the powerful economic department under Pell in 2014.
But while the move sparked shockwaves at the time, Pell's powers have been trimmed since – most notably when the body that manages the Vatican's huge assets resumed control of its own affairs.
Milone's resignation is “destined to raise questions not merely about what the motives were for his sudden departure, but also the broader direction of the reform effort under Pope Francis,” the Crux.com religious website said.
It would reinforce the perception that “in some ways the financial management of the Vatican today is returning to the situation prior to his election”, it added.