| In Matthew 16:19 Jesus gives Peter not only the keys to the Kingdom of Heaven, but also the authority of binding and loosing sins. In John 20:22 he subsequently gives the same authority to all the apostles after his resurrection.
In 2 Cor 5:18-20 we see Paul speaking of having the ministry of forgiveness entrusted to him and of being an "ambassador" of Christ. Ambassadors are given authority to act on behalf of the person they represent. Also, Paul was not a witness to the resurrection but became Christian later. The authority to forgive, then, must have been given to him by one of the apostles.
Finally, in James 5:16 we are exhorted to "confess our sins to one another," and this is mentioned in the context of prayers by the priests of the Church.
Forgiveness of sins involving priests, then, has been around since the early Church; however, the present form of the sacrament goes back at least to Irish monks in the 7th Century, who received it themselves from Eastern Rite monasticism.
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