The Dean of Ripon, the Very Rev John Methuen, could face trial in a Church court if independent examiners find sufficient evidence against him.
If found guilty he could be admonished, removed from office, or "defrocked".
It is understood the for
mer Eton chaplain has been accused of having an extremely "overbearing" management technique.
But the Dean today denied the allegations and said he was determined to clear his name.
Several senior members of staff have quit Ripon Cathedral since the row with the Dean first erupted in 2001. They include chapter clerk Howard Crawshaw, bursar Nigel Clay and organist Kerry Beaumont.
Simon Morley, appointed to succeed Mr Beaumont, also quit after fewer than six months in the job.
The Bishop of Ripon and Leeds, the Rt Rev John Packer, announced Dean Methuen's suspension at a service at Ripon Cathedral yesterday. He said the move had been taken to "eliminate, as far as possible, continued pressure and gossip".
He told the congregation: "A number of formal complaints against the Dean, of conduct unbecoming the office and work of a clerk in Holy Orders, have been laid before me.
"To eliminate as far as possible continued pressure and gossip, I have decided to inhibit the Dean from the exercise of his office until such time as these matters are disposed of, either by a rejection of the complaints by an independent examiner, or by means of a trial in a Consistory Court."
He asked the congregation to pray for the Very Rev Methuen and his family "at this difficult time."
The Dean, a former vicar from inner-city Manchester, is suspended on full pay of around £26,000 a year.
Complaints against him will be sent to an independent examiner, a lawyer previously approved by the Diocesan Synod, who will decide whether there is a case to answer.
If there is, there will be a trial in the Church's Consistory Court. That would not be likely to happen until next year.
Dean Methuen has been in charge of Ripon Cathedral since 1995 and cannot be removed from office unless convicted of a serious offence in the secular or ecclesiastical courts.
Distressed
In a statement today Dean Methuen said: "I am entirely innocent of any complaints against me. I am deeply saddened that matters concerning Ripon Cathedral remain unresolved and that the Bishop has decided to institute formal processes. I have committed no offence, Ecclesiastical or otherwise, and will strenuously defend myself within the proceedings.
"I am particularly distressed that the Bishop has suspended me from performing my function as Dean. I look forward to resuming my duties as soon as possible."
vicki.shaw@ypn.co.uk