"As the song says, you have to know when to hold them and when to fold them," Martino said at a news conference. "And I think it's time to move on."
Martino had been heavily criticized by parishioners who felt his imperious leadership style and staunch defense of Catholic orthodoxy had alienated many in the diocese of 350,000. Supporters said Martino was simply enforcing church doctrine.
Martino said he submitted his resignation to the Vatican in June. Pope Benedict XVI accepted it Monday under a provision of church law in which a bishop, due to illness or "some other grave reason, has become unsuited" to carry out his duties.
The pope also accepted the resignation of Scranton's auxiliary bishop, John Dougherty, for reasons of age. Dougherty submitted his letter of resignation to the Vatican more than two years ago, when he turned 75, but it has not been accepted until now.
Martino made headlines earlier this year when he blasted a local Catholic university for sponsoring a lecture by a gay-rights advocate. He also threatened to cancel a traditional St. Patrick's Day parade Mass if event organizers honored an abortion-rights supporter.
Cardinal Justin Rigali, who leads the Archdiocese of Philadelphia, was appointed to oversee the Scranton diocese until the Vatican appoints a new bishop. Monsignor Joseph Bambera, pastor of two parishes in Archbald, will oversee the diocese's daily operations, Rigali said Monday.
Rumors of Martino's departure had been swirling for days after The Times-Tribune of Scranton reported last week that workers had started moving furniture from the bishop's rectory residence in Scranton to a retreat home several miles away.