Donald Rumsfeld said on Tuesday that Lieutenant General William Boykin's request, which followed a furore over his allegedly "anti-Muslim" comments, was "appropriate".
Boykin, deputy undersecretary of defence for intelligence, denied he was anti-Muslim after being quoted as saying the so-called war on terrorism was a Christian struggle against Satan.
The Bush administration has distanced itself from the general's remarks, but has ignored calls by critics that he be reprimanded or reassigned.
Speaking in uniform before a Christian group in June, Boykin claimed “radical Islamists” hate America “because we're a Christian nation, because our foundation and our roots are Judeo-Christian...and the enemy is a guy named Satan.”
Our “spiritual enemy,” Boykin said, “will only be defeated if we come against them in the name of Jesus.”
The general infamously also referred to a Somali commander who boasted on CNN that he would not be captured because Allah would protect him.
"I knew that my God was bigger than his. I knew that my God was a real God and his was an idol," Boykin said.
“Radical Islamists (hate America)... because we're a Christian nation, because our foundation and our roots are Judeo-Christian...and the enemy is a guy named Satan”
US deputy undersecretary of defence for intelligence
Apologising if he had offended anyone, Boykin said last week that the reference to an "idol" was not to Allah but to the "worship of money and power".
Boykin's statements were vetted by Pentagon lawyers and public affairs officials before they were released, but Rumsfeld insisted they were Boykin's alone and did not reflect the Pentagon's views.
And General Peter Pace, vice chairman of the Joint Chiefs of Staff, said Boykin had told him he was saddened by the furore.
"There's no doubt in my mind, in talking to him, that if he could pick his words more carefully he would," Pace said.
Good v Evil
"There's also no doubt in my mind that he does not see this battle as a battle between religions.
"He sees it as a battle between good and evil. He sees it as the evil being the acts of individuals, not the acts of any religion or affiliation with religion."
An evangelical Christian, Boykin was a former commander of the army's ultra secret Delta force and took part in special operations in Iran, Colombia and Somalia.
As deputy under secretary for intelligence, he was charged with reinvigorating the hunt for Usama bin Laden and other "high value" targets.
“Putting a man with such extremist views in a critical policy-making position sends entirely the wrong message to a Muslim world that is already sceptical about America’s motives and intentions"
Following his remarks, American Muslim groups reacted with outrage.
Nihad Awad, Council on American Islamic Relations Executive Director, said: “Putting a man with such extremist views in a critical policy-making position sends entirely the wrong message to a Muslim world that is already sceptical about America’s motives and intentions.
“Everyone is entitled to their own religious beliefs, no matter how ill-informed or bigoted, but those beliefs should not be allowed to colour important decisions that need to be made in the war on terrorism.
"General Boykin should be reassigned to a position in which he will not be able to harm our nation’s image or interests.”