The Vatican has arrested a former archbishop accused of paying for sex with children while he was a papal ambassador in the Dominican Republic, the first-ever arrest inside the city state on charges of paedophilia.

Jozef Wesolowski, a Pole who was defrocked by a Vatican tribunal in June, was placed under house awaiting a criminal trial, the Vatican said in a statement.

Wesolowski was granted house arrest in a Vatican apartment for medical reasons, rather than detained in the Vatican prison, a couple of rooms attached to a courthouse.

The 66-year-old was the most prominent church figure to be arrested since Paolo Gabriele, a former papal butler convicted in 2012 of stealing and leaking private papers of former Pope Benedict XVI.

Wesolowski was recalled to Rome by the Vatican last year when he was still a diplomat in Santo Domingo and was relieved of his duties after Dominican media accused him of paedophilia.

He was living freely in Rome, and victims of sexual abuse called for his arrest amid concerns he would flee.

The former archbishop faced up to 12 years in jail in what would be the first trial for sexual abuse held inside the Vatican City.

Wesolowski was also being investigated in the Dominican Republic over accusations he paid boys to perform sexual acts.

He served in the Dominican Republic as nuncio, or ambassador, but no longer has diplomatic immunity.

The Vatican said the arrest reflected the wishes of Pope Francis "that such a grave and delicate case be handled without delay, with the just and necessary rigour".

Francis, the first non-European pope in 1,300 years, vowed zero tolerance against Roman Catholic clerics who sexually abused children.

Last May, he called such abuse an "ugly crime" and likened it to "a Satanic Mass".

In July, he told victims of sexual abuse the Church should "weep and make reparation" for crimes he said had taken on the dimensions of a sacrilegious cult.

Reuters