Father Paul Kubista is pastor at St. Mary of Czestochowa Catholic Church.
Pope Francis accepted Rev. Michael Hoeppner's resignation Tuesday.
The employee is currently on leave pending an MPD investigation.
Archbishop Bernard Hebda addressed the controversy in a letter.
"Religious leadership today must do everything in our power to prevent a 'boiling point' with Covid 19," the statement reads
In a letter to partner churches, Catholic leaders said Mass can resume at one-third capacity.
The priest made controversial remarks during a service in Lonsdale, Minnesota.
The settlements will allow the diocese to avoid bankruptcy, according to a statement.
John Nienstedt resigned in disgrace from the archdiocese in 2015