The Pope has made it a legal requirement for Vatican personnel and Holy See diplomats to report any allegations of sexual abuse “without delay”.
In a policy shift aimed at becoming a model for the Catholic Church worldwide, officials found not to have made police aware of allegations of sexual abuse soon after they are made face fines of up to £4,300 or a possible six months in prison.
Pope Francis has also issued child protection guidelines for Vatican City State and its youth seminary.
The legislation for the first time provides an explicit Vatican definition for “vulnerable people”, who are entitled to the same protections as minors under church law.
It defines a vulnerable person as anyone who is sick or suffering from a physical or psychiatric deficiency, is not able to exercise personal freedom even on occasion, and has a limited capacity to understand or resist the crime.
The Vatican previously amended its law covering sex abuse to include “vulnerable adults”, but never defined it.
Pope Francis came under huge scrutiny last year after the global church sex abuse scandal made headlines agin, and was even accused of having known about certain allegations and helping to cover them up.
During a visit to Ireland in the summer, Francis criticised corruption within the church and insisted he was committed to ensuring that such scandals would not emerge in future.
The new law covers all personnel who live and work in the Vatican, the 110-acre city state in the centre of Rome, as well as the vast diplomatic corps of the Holy Sees in embassies around the world.
It requires that victims be welcomed, listened to and provided with medical, psychological and legal assistance, and sets the statute of limitations at 20 years past their 18th birthday.
They and their families are also to be protected from any possible retaliation, while the accused is to be removed from their job pending an investigation and be allowed to defend themselves.
Background checks will now be required for staff and volunteers working with minors, and there will be safe environment training for all Vatican personnel.
The new legislation comes after the Associated Press reported last year that the Vatican had no policy to protect children from predator priests or report suspected abuse to the police, even though the UN had been told such plans were in the works as far back as 2013.
That commitment came following revelations in 2012 that a teenage seminarian in the Vatican youth seminary had accused one of the older boys of molesting his room-mate.
Nothing came of it and the student who lodged the complaint, Kamil Jarzembowski, was promptly kicked out of the seminary while the accused was ordained as a priest.
On Friday, Mr Jarzembowski said the law was a positive step forward, adding: “Before there was a situation where a group of kids were there, in the Vatican City, but they were seemingly in a legal limbo.”