The official announcement:
“The Holy Father has been continually informed in detail and objectively on the situation regarding the diocese of Limburg. In the diocese, a situation has arisen in which Bishop Franz-Peter Tebartz-van Elst cannot, at the present moment, continue to exercise his episcopal ministry.
Following Cardinal Lajolo’s ‘fraternal visit’ in September, the German Bishops’ Conference, in accordance with an agreement between the bishop and the Chapter of Limburg Cathedral, has constituted a Commission to carry out a detailed examination of the matter of the building of the bishop’s residence. Pending the results of this examination and of an analysis of responsibility for the matter, the Holy See considers it appropriate to authorise for Bishop Franz-Peter Tebartz-van Elst a period of stay outside the diocese.
By decision of the Holy See, Stadtdekan Wolfgang Rosch is today appointed as vicar general, an appointment that had previously been announced by the diocese of Limburg as taking effect from 1 January 2014. Vicar General Rosch will administer the diocese of Limburg during the absence of the diocesan bishop, within the sphere of competence associated with this office”.
You will note the actual verbiage is that he is “authorized” to stay outside the diocese until this investigation is complete. That is distinctly different verbiage than him being required to live outside the diocese.
Can. 395 §1. Even if a diocesan bishop has a coadjutor or auxiliary, he is bound by the law of personal residence in the diocese.
§2. Apart from ad limina visits, councils, synods of bishops, conferences of bishops which he must attend, or some other duty legitimately entrusted to him, he can be absent from his diocese for a reasonable cause but not beyond a month, whether continuous or interrupted, and provided that he makes provision so that the diocese will suffer no detriment from his absence.
§3. He is not to be absent from the diocese on Christmas, during Holy Week, and on Easter, Pentecost, and the Feast of the Body and Blood of Christ, except for a grave and urgent cause.
There is some more information at the Catholic Herald: Pope authorises leave of absence for German ‘luxury bishop’