This study proposes an approach for error correction in clinical radiology reports, leveraging large language models (LLMs) and retrieval-augmented generation (RAG) techniques. The proposed framework employs internal and external retrieval mechanisms to extract relevant medical entities and relations from the report and external knowledge sources. A three-stage inference process is introduced, decomposing the task into error detection, localization, and correction subtasks, which enhances the explainability and performance of the system. The effectiveness of the approach is evaluated using a benchmark dataset created by corrupting real-world radiology reports with realistic errors, guided by domain experts. Experimental results demonstrate the benefits of the proposed methods, with the combination of internal and external retrieval significantly improving the accuracy of error detection, localization, and correction across various state-of-the-art LLMs. The findings contribute to the development of more robust and reliable error correction systems for clinical documentation.