Victoria's Deputy Police Commissioner, Shane Patton, confirmed in a brief press conference on Thursday morning that Cardinal Pell had been issued with multiple charges relating to historical sexual abuse allegations.
Cardinal Pell is the third most senior Catholic at the Vatican, where he is responsible for the church's finances.
He has repeatedly and emphatically denied all allegations, but said he would continue to co-operate with the police investigation.
All was quiet at Cardinal Pell's Roman residence as the news broke.
As Australia has no extradition treaty with the Vatican, Cardinal Pell may avoid prosecution should he choose not to return to Victoria, but he is expected to come back to fight the charges.
When it comes to historical sex abuse prosecutions, the charge an alleged offender faces, and the applicable maximum penalty, is determined by when the alleged offence occurred.