Gian Pietro Milano, the small country's Promoter of Justice, revealed the news at a press conference.
He refused to reveal the exact details of why the funds were frozen but said it was related to claims of money laundering - when money is transferred through respectable institutions to hide its illegal origins.
Pope Francis has been overseeing a crackdown on financial malpractice in the Church since taking the papacy.
Milano said since 2013 €13m (£11.1m) had been identified as being possibly laundered through the Catholic Church.
The latest freeze came after alerts from the Vatican Financial Intelligence Authority, which has been considerably more resources by Francis.
