NEW YORK -- The Vatican has exonerated an East Hanover, N.J., priest who was accused of sexually abusing two girls in 1980.

The allegations were made against Monsignor William McCarthy six years ago by the mother of the two girls, ages 5 and 6 at the time of the alleged abuse.

"A Church Tribunal, composed of canon lawyers from outside the diocese, concluded that it was not proven that he was guilty of the charge alleged against him," the Paterson Diocese said in a statement. "The Holy See has determined that the case is closed."

The statement said that McCarthy is "free to exercise his priestly ministry as a retired priest" and praised the cleric as "totally cooperative" and "faithful to his priesthood" during the time the allegations were investigated.

McCarthy had been the pastor of St. Rose Lima church in East Hanover.