•Mr Austin, 70, will remain at the Walter Reed National Military Medical Center in Virginia for treatment.
•Mr Austin apologised for the incident last week.
US Defence Secretary Lloyd Austin has transferred duties to his deputy while in hospital for an "emergent bladder issue", the Pentagon has said.
Mr Austin, 70, will remain at the Walter Reed National Military Medical Center in Virginia for treatment.
The Pentagon said the White House and senior officials had been informed.
The defence secretary was under scrutiny for failing to disclose his prostate cancer diagnosis and hospital stays in December and January.
Mr Austin apologised for the incident last week.
He is scheduled to testify before Congress at the end of this month about his failure to notify government leaders.
At about 16:55 local time (21:55 GMT), the Pentagon released a second statement saying Mr Austin "transferred the functions and duties of the office" to Deputy Defence Secretary Kathleen Hicks.
Late last year, Mr Austin had surgery for prostate cancer.
He was readmitted to hospital on New Year's Day with severe pain in his leg, hip and abdomen because of complications related to the procedure. An evaluation found a urinary tract infection and he remained in hospital for more than two weeks.
Senior defence officials and the Biden administration did not know that Mr Austin was seriously ill until three days after his re-admission in January.
The incident incited concerns over both transparency and security and prompted three separate investigations into Mr Austin's handling of his illness and hospital stays. Some prominent Republicans called for Mr Austin to be removed from his post.
He has been called to testify in front of a Congressional committee about his failure to inform President Biden and other top officials this month.
The defence secretary is just below the president in the chain of command for the US military, and is regarded as one of the most important members of the cabinet.