Christian Brothers were also moved after complaints, in some cases with the true reason concealed as the religious order sought to protect its reputation and avoid scandal and embarrassment.
There were widespread rumours about Christian Brothers' sexual misconduct at St Alipius primary school and St Patrick's College in Ballarat, where numerous boys were abused in the 1970s.
The royal commission's investigation exposed a catastrophic failure in the leadership of the vast Victorian diocese and ultimately the church structure and culture to effectively respond to its priests abusing children.
The inexcusable failures resulted in many children being sexually abused by Catholic clergy in the diocese.
"That failure led to the suffering and often irreparable harm to children, their families and the wider community," the commission said in its report released today.
"That harm could have been avoided if the church had acted in the interests of children rather than its own interests."
The commission found Bishop Mulkearns, the 1971-1997 Ballarat bishop, told a number of significant people in the church about Ridsdale's conduct.
Two Sydney archbishops were told Ridsdale's access to children needed to be restricted.
The commission rejected suggestions Bishop Mulkearns lied to or deceived his advisers on the College of Consultors in 1982 about why Ridsdale was removed from Mortlake parish and sent to Sydney's Catholic Enquiry Centre.
The commission said it was satisfied Bishop Mulkearns told the consultors it was necessary to move Ridsdale from the diocese and from parish work because of complaints he had sexually abused children.
"A contrary position is not tenable."
The commission said Bishop Mulkearns and other clergy were dismissive of complaints and complainants, only taking any action when there was a possibility a priest's sexual abuse of children would become widely known.
"It is apparent that the avoidance of scandal, the maintenance of the reputation of the church and loyalty to priests alone determined the response."
Reports were never made to the police and victims were not supported.
The commission said the response of the Christian Brothers leadership to victims, their families or the community to rumours and complaints of sexual abuse was grossly inadequate and dismissive.
Questions were not asked and few investigations were undertaken, it said.
Current Ballarat Bishop Paul Bird said the mishandling of complaints and lack of response led to unnecessary suffering for many victims and their families and created distress for communities throughout the diocese.
"Where the failures of my predecessors allowed abuse to occur, I offer my heartfelt apology," he said.
