The Gothenburg cathedral chapter ruled on Thursday to revoke the pastor's licence.
"This means in practice that he is unable to work as a pastor," Margareta Wicander, a lawyer for the diocese, told the Borås Tidning (BT) daily.
The pastor, who is from Sjuhärad in western Sweden, has been suspended since the revelations emerged and became known to his church employers.
He admitted to the soliciting offence in a letter to the diocese, claiming that he suffers from a serious sex addiction that he is attempting to deal with, aided by a colleague who also suffers from the condition.
The pastor will be reconsidered for a position if he is successful in his battle to purge himself of his sex addiction.
While he is currently employed as a pastor, it will be up to the parish of Sjuhärad to decide whether to reassign him or offer redundancy.
The priest was caught red-handed by police officers who had followed him and witnessed how he picked up a prostitute in his car in Gothenburg.
According to BT the priest had just managed to equip himself with a condom when the police unit exposed him.
This is not the first time that the pastor's sex habits have landed him in hot holy water.
Back in 2005 he was caught surfing for pornography using one of the church's computers, an incident that was referred to in the diocese's deliberations.