Archbishop Luigi Ventura, 74, is alleged to have inappropriately touched a junior male official working at the Paris city hall, deputy mayor Patrick Klugman told CNN earlier this year.
The French government confirmed it received "confirmation from the Holy See that it waived immunity" for Ventura.
The interim director of the Vatican press office, Alessandro Gisotti, said the decision demonstrated Ventura's commitment to cooperating with the investigation.
"This is an extraordinary gesture that confirms the will of the Nuncio (ambassador), expressed from the beginning of this situation, to collaborate fully with the French judicial authorities," Gisotti said.
Ventura has been based in Paris since 2009, serving as a diplomat for Pope Francis, Agence France-Presse reported.