The Vatican's economy minister has said hundreds of millions of euro was found "tucked away" in accounts of various Holy See departments without having appeared in the city-state's balance sheets.

In an article for Britain's Catholic Herald Magazine published today, Australian Cardinal George Pell wrote that the discovery meant overall Vatican finances were in better shape than previously believed.

"In fact, we have discovered that the situation is much healthier than it seemed, because some hundreds of millions of euro were tucked away in particular sectional accounts and did not appear on the balance sheet," he wrote.

"It is important to point out that the Vatican is not broke... the Holy See is paying its way, while possessing substantial assets and investments," Cardinal Pell said.

He did not suggest any wrongdoing but said Vatican departments had long had "an almost free hand" with their finances and followed "long-established patterns" in managing their affairs.

"Very few were tempted to tell the outside world what was happening, except when they needed extra help," he said, singling out the once-powerful Secretariat of State as one department that had especially jealously guarded its independence.

"It was impossible for anyone to know accurately what was going on overall," said Cardinal Pell, head of the new Secretariat for the Economy that is independent of the now downgraded Secretariat of State.

Cardinal Pell was transferred by Pope Francis from Sydney to Rome to oversee the Vatican's often muddled finances after decades of control by Italians.

His office sent a letter to all Vatican departments last month about changes in economic ethics and accountability.

Each department's financial statements will be reviewed by a major international auditing firm, the letter said.

Since the pope's election in March, 2013, the Vatican has enacted major reforms to adhere to international financial standards and prevent money laundering.

It has closed many suspicious accounts at its scandal-rocked bank.

In his article, Cardinal Pell said the reforms were "well under way and already past the point where the Vatican could return to the "bad old days".