The Duke and Duchess of Sussex have announced that they will "step back as 'senior' members of the Royal Family", and attempt to carve out a new role away from the family's top tier.
They claim that this move will see them "work to become financially independent" in their new role.
The couple, who married less than two years ago, will no longer live in Britain full time and instead split their time between the UK and North America.
They will still work to support The Queen and the Commonwealth, they added.
Harry and Meghan's statement in full:
A personal message from The Duke and Duchess of Sussex
"After many months of reflection and internal discussions, we have chosen to make a transition this year in starting to carve out a progressive new role within this institution.
"We intend to step back as 'senior' members of the Royal Family and work to become financially independent, while continuing to fully support Her Majesty The Queen.
"It is with your encouragement, particularly over the last few years, that we feel prepared to make this adjustment.
"We now plan to balance our time between the United Kingdom and North America, continuing to honour our duty to The Queen, the Commonwealth, and our patronages.
"This geographic balance will enable us to raise our son with an appreciation for the royal tradition into which he was born, while also providing our family with the space to focus on the next chapter, including the launch of our new charitable entity.
"We look forward to sharing the full details of this exciting next step in due course, as we continue to collaborate with Her Majesty The Queen, The Prince of Wales, The Duke of Cambridge and all relevant parties.
"Until then, please accept our deepest thanks for your continued support."
Why did they step back?
The official reason given by the Duke and Duchess of Sussex is that the "geographic balance" of living between the UK and America "will enable us to raise our son with an appreciation for the royal tradition into which he was born".
The move will also provide the family "with the space to focus on the next chapter, including the launch of our new charitable entity", according to the statement.
But The Duke and Duchess of Sussex have also had a difficult relationship with the media over the course of the last year.
Their official royal tour of South Africa was overshadowed by legal action and a candid documentary with ITV in which the former actress said she struggled with the intensity of press interest in their lives and said she felt vulnerable.
During the tour, it was announced the Duchess had filed a lawsuit against the Mail on Sunday in a battle over alleged breach of copyright and privacy.
And her husband launched a scathing attack on the British tabloid press, accusing them of a "ruthless campaign" against his wife.
Referring to the death of his mother Diana, Princess of Wales, he said: "I lost my mother and now I watch my wife falling victim to the same powerful forces.”
What was the palace's response?
The BBC's royal correspondent Jonny Dymond said palace sources had told him other family members were not informed in advance.
He wrote on Twitter that "senior members of the Royal family feel 'hurt' by the announcement that Harry and Meghan are to withdraw from their current Royal roles."
A statement from Buckingham Palace suggested the way forward had not been fully worked out.
A spokeswoman said: "Discussions with The Duke and Duchess of Sussex are at an early stage. We understand their desire to take a different approach, but these are complicated issues that will take time to work through."
The historic decision echoes the abdication of Edward VIII, who quit as King in 1936 in a crisis over marrying American socialite Wallis Simpson.
A version of this article was originally published on iNews.