Prince Harry and his wife Meghan Markle, the Duke and Duchess of Sussex, have signed up to a formal exit deal from the royal family, which will see them forsake their His and Her Royal Highness (HRH) titles and will no longer receive UK taxpayers' funding for their duties.
The deal, which comes into effect by spring in a few weeks' time, means the couple will no longer be representing the Queen in an official capacity.
"The Sussexes will not use their HRH titles as they are no longer working members of the royal family," Buckingham Palace said in a statement on Saturday night.
Queen Elizabeth II said the agreement followed months of discussions and was a "constructive and supportive" way forward for her grandson and his family.
"Harry, Meghan and Archie will always be much loved members of my family," the 93-year-old monarch's personal statement read.
"I recognise the challenges they have experienced as a result of intense scrutiny over the last two years and support their wish for a more independent life," she said, thanking the couple for their work for the UK and across the Commonwealth.
In a special message for 38-year-old Markle, she said, "I am... particularly proud of how Meghan has so quickly become one of the family. It is my whole family's hope that today's agreement allows them to start building a happy and peaceful new life".
The palace confirmed that the couple were required to withdraw from royal duties, including official military appointments.
"While they can no longer formally represent the Queen, the Sussexes have made clear that everything they do will continue to uphold the values of Her Majesty," the palace said.
It added that the pair would continue to maintain their private patronages and associations.
The couple intend to repay 2.4 million pounds of UK taxpayers' money for the refurbishment of Frogmore Cottage, which will remain their UK family home as they split their time between Britain and Canada.
The palace has declined to comment on security arrangements and who would foot that bill for the couple in future, an issue that has been at the centre of much of the debate since Harry, 35, and Meghan made their bombshell announcement earlier this month that they intend to "step back" from being frontline royals and split their time between the UK and North America, and work towards becoming "financially independent".
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