Cardinal Keith O'Brien, who admitted inappropriate behaviour towards priests, went into exile after the launch of a Vatican investigation which is still ongoing. It has now emerged that he is living in a village in Northumberland.
A spokesman for the Archdiocese of St Andrews and Edinburgh said the housing of the cardinal was a legitimate duty and was carried out legally.
He said: "Cardinal O'Brien remains a retired priest of the Archdiocese of St Andrews and Edinburgh.
"Like him, some retired clergy have accommodation bought for their use, although such properties are always owned by the diocese.
"This is the case with the house arranged for Cardinal O'Brien. Its location is in accordance with the agreement between him and the Holy See. The details of the transaction are a matter of public record and its price was within the cost range of other purchases for retired clergy housing."
Archbishop Leo Cushley, who was born in Airdrie, has replaced Cardinal Keith O'Brien as the Archbishop of St Andrews and Edinburgh.
The cardinal stepped down in 2013 after admitting sexual misconduct.
Three serving Catholic Fathers and one former priest came forward to accuse the cardinal of inappropriate sexual contact with them dating back a number of years.
One claimed Cardinal O'Brien made an approach to him in 1980, after night prayers, when he was a seminarian at St Andrew's College, Drygrange.
Another complainant said he had been living in a parish when he was visited by the cardinal and inappropriate contact had taken place.
A third complainant alleged he had faced what he described as "unwanted behaviour" by the cardinal in the 1980s.
Bishop Charles Scicluna has been appointed by the Congregation for Bishops as its special envoy to listen and report on allegations against the former Archbishop of St Andrews and Edinburgh following a request from Pope Francis.
Cardinal O'Brien, who lived in Edinburgh, went into exile in February last year when the Vatican ordered him to undertake an unspecified period of "prayer and penance".