Mahabaleshwor Bhatta, who hails from Tamil Nadu, gave his resignation to the Pashupati Area Development Trust, the body that looks after the Hindu temple's affairs. The board of the trust accepted his resignation.
The decision was forwarded to the Ministry of Tourism and Culture, the ultimate authority to approve the resignation, temple authorities said. They said a new chief priest will be appointed from among the temple's four other Indian priests.
Bhatta told the temple authorities that he decided to quit as he has to serve his old parents. "I have already served the temple for 21 years and my parents who live in India are getting older so I was required to go to India to serve them," he said.
However, the decision was withdrawn and Bhatta was reinstated after Hindu groups launched a protest.
It is a centuries-old practice to appoint Indian nationals as priests at the Pashupatinath Temple. Bhattas are qualified for the post.