Reverend Greg Fry was born a man, but told members he will now live as a woman.
Fry now wants to be called Gwen.
Church leaders met with the congregation and Fry, and decided it would be best to dissolve Fry's relationship with the members.
Bishop Larry Benfield says the church can now begin the healing process.
"The priest will now be able to transition without outside problems to worry about and the congregation can be refocused on its mission to work in the community," said Benfield.
Reverend Fry has not returned our repeated calls for comment.
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