An assistant bishop is set to become the most senior Anglican in Australia to be defrocked after a church committee found he took no action when he was told a priest had sexually abused a child.

Assistant Bishop Richard Appleby has 28 days to appeal the decision made Tuesday by the Professional Standards Board of the Anglican Diocese of Newcastle. It strips him of all roles in the church other than parishioner.

Appleby's lawyer Peter Skinner said he had yet to take instructions from his 78-year-old client on whether he would appeal.

The church investigation follows criticisms of Appleby in a government-commissioned inquiry into institutional responses to child sex abuse.

The board found Appleby did nothing after an accuser said in 1984 he had been sexually abused by a priest.