It happened in Germany.
Details, from the New York Daily News:
A married father of two in Germany was ordained as a Catholic priest on Tuesday, a rare move by the church, which typically requires priests to be single and to take a vow of chastity.
Since then, Klueting’s wife, whose name was not given, has become a nun in the Carmelite order.
Klueting was ordained by Archbishop Joachim Cardinal Meisner during a private ceremony in Cologne.
The case was so rare that it required the special permission of Pope Benedict XVI.
“This happens seldom but it’s not unusual,” diocese spokesman Christoph Heckeley told Reuters.
The Cologne archdiocese said in a statement that the new priest did not have to take a vow of celibacy.
Carmelite nuns typically lead strict, cloistered lifestyles, and it’s not clear if Klueting and his wife live together.
There’s more at the link.
Unclear to me is how this differs — if it does — from the Pastoral Provision in force in this country. Any ideas?
UPDATE: Canon lawyer Ed Peters weighs in on this story and notes:
A consummated marriage between two baptized persons can be dissolved only by death. So the pope did not need to approve this couple’s “staying married”.
Rather, the pope doubtless dispensed him from the impediment that marriage is for the reception of holy Orders (1983 CIC 1042, 1°) and her from the obstacle that marriage is for entry into religious life (1983 CIC 643 § 1, 1°). Before these dispensations were granted, one can be sure, the couple demonstrated full awareness of the rights they were surrendering (such as that of conjugal living, per 1983 CIC 1135 and 1151). In any case, while such dispensations are not common, neither are they unheard of, even in modern times.
And Fr. Z. has a few insights, as well.