Grantham Nicholas Chamberlain has revealed that he is gay and in a relationship.
Mr Chamberlain is in a long-term, celibate relationship with a male partner, he told The Guardian.
His announcement came after an unnamed Sunday newspaper reportedly threatened to publish a story revealing his homosexuality.
He said it had not been his decision "to make a big thing about coming out".
He added: "People know I'm gay but it's not the first thing I'd say to anyone.
"Sexuality is part of who I am but it's my ministry that I want to focus on."
He said that those who had appointed him to his role in November "knew about my sexual identity" and that living within these guidelines had been "explored" during the process.
These guidelines say that gay clergy must be celibate and are not allowed to marry.
Most Rev Justin Welby, Archbishop of Canterbury, said that he had been "fully aware" of Mr Chamberlain's "long-term, committed relationship".
He added: "(Mr Chamberlain's) appointment as Bishop of Grantham was made on the basis of his skills and calling to serve the church in the diocese of Lincoln.
"He lives within the bishops' guidelines and his sexuality is completely irrelevant to his office."
The Church of England has been grappling with issues of sexuality for the past few years, with discussions surrounding its attitude to LGBT people and whether same-sex marriage is acceptable.
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