Miguel Angel Ibarra carried out weddings and baptisms, first in Colombia and then in southern Spain, despite having never been ordained.
Those ceremonies will still be recognised, the Church says, but not his communions or the confessions he heard.
He was found to be an impostor after a complaint was filed in Colombia.
The complainant alleged Mr Ibarra had forged his documents.
After a "thorough investigation", it was found that he had never been ordained and he has now been ordered to return to Colombia, Church officials say.
Mr Ibarra moved to Spain last October, settling in the town of Medina-Sidonia, which is home to more than 11,000 people.
"Events like this could overshadow the work of parishioners and ordained priests, who serve the Church every day in an exemplary way," the local diocese said in a statement.
This is not the first time someone has been caught in the act of pretending to be a Catholic priest.
In 2008, a man who had not been ordained was found to be hearing confessions in St Peter's Basilica in the Vatican.
He was wearing clerical robes, but was later unmasked as a fake after his documents were checked by the Italian authorities.
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