Xuecheng, a Communist Party member and abbot of Beijing's Longquan Monastery, is one of the most prominent figures to face accusations in China's growing #MeToo movement.
He stepped down earlier this month after a report by fellow monks accused him of sexual and financial improprieties.
In the 95-page report that circulated online late last month, two monks accused Xuecheng of sending explicit text messages to at least six women, threatening or cajoling them to have sex with him, claiming it was a part of their Buddhist studies.
The National Religious Affairs Authority said it had confirmed Xuecheng had sent "harassing messages", adding that authorities had begun a criminal investigation into the report's charges of sexual assault.
Investigators had also uncovered evidence that the Longquan Monastery had violated national financial regulations, it added in a statement on its web site.
Xuecheng, 51, stepped down at a meeting of the Buddhist Association of China earlier this month following the allegations.
The abbot is also a member of the Chinese People's Political Consultative Conference, a top advisory board.
A prominent personality in Chinese Buddhist life with a social media following of millions, Xuecheng's Weibo account has been silent since August 1, when he posted a statement rejecting allegations of sexual misconduct.
In their report, the two monks, who are no longer members of the monastery, said four women gave in to Xuecheng's demands.
One of the authors said on social media that he was compelled to speak out after the victims were ignored by authorities who said they could not investigate the matter.
There is no legal definition of sexual harassment in China and no national regulations on how to handle sexual assault cases in schools and workplaces.
The report and posts about it have been taken down or censored on social media. Both men were also asked to leave the monastery after news of the report broke.
Located on the outskirts of Beijing, Longquan Monastery has made headlines for combining Buddhism with modern technology, launching last year a two-foot high robot monk that dispenses mantras and karmic advice.
The #MeToo movement ignited in China earlier this year with more women starting to open up about sexual assaults, especially on university campuses.
Unlike in the West, where #MeToo has forced resignations and sparked widespread public debate, authorities in China have sought to control the discussion, sometimes allowing and at other times censoring social media commentary.