The Catholic church in Germany is to sell Weltbild, its bookselling arm, after the unit admitted last month to publishing pornographic novels.
Weltbild is one of Germany's main book enterprises, with annual sales of à1.6-billion and a workforce of 6400.
Its interests include general publishing, a main national bookshop chain and book clubs.
Catholic leaders were outraged that the profitable company's book range included steamy pulp novels with titles like Boarding School for Sluts and The Lawyer's Whore and advice on how to practise esoteric superstitions.
Germany's 27 bishops met this week to press the 12 bishops who co-owned Weltbild to end the investment after Weltbild defended its commercial policy of publishing whatever books met market demand.
Weltbild, based in the southern city of Augsburg, said it welcomed the decision to seek new ownership "without delay".
Pope Benedict XVI, who urged German bishops in September to get rid of worldly wealth, appeared to influence the debate, telling Catholics they should be "energetically opposing the distribution of erotic and pornographic material".