A highly precise model for the motion of a rigid Earth is indispensable to reveal the effects of non-rigidity in the rotation of the Earth from observations. To meet the accuracy goal of modern theories of Earth rotation of 1 microarcsecond (μas) it is clear, that for such a model also relativistic effects have to be taken into account. The largest of these effects is the so called geodetic precession. In this paper we will describe this effect and the standard procedure to deal with it in modeling Earth rotation up to now. With our relativistic model of Earth rotation (Klioner et al. 2001) we are able to give a consistent post-Newtonian treatment of the rotational motion of a rigid Earth in the framework of General Relativity. Using this model we show that the currently applied standard treatment of geodetic precession is not correct. The inconsistency of the standard treatment leads to errors in all modern theories of Earth rotation with a magnitude of up to 200 μas for a time span of one century.