Harry and Meghan’s groundbreaking decision came in a statement, and the couple said they will work to become financially independent, while continuing to “fully support” the Queen.
However, Buckingham Palace has warned the Duke and Duchess of Sussex that their decision will be "complicated" and talks are still at an early stage.
It is understood that the Queen and the Prince of Wales were not aware of the content of Harry and Meghan's bombshell personal statement before it was issued.
The couple’s move follows weeks of speculation about their future after they took an extended break from royal duties over the festive period that followed an emotional appearance in a documentary.
In the ITV programme they spoke about the pressures they have been facing and family rifts, and in a separate move Harry issued a damning statement against the media accusing sections of the press of bullying his wife.
The couple said in their statement: “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.”
Harry and Meghan have only recently returned from their six-week break spent in the Canadian province of British Columbia with their eight-month-old son Archie.
Their first royal engagement of the new decade was to visit Canada’s High Commission in central London to thank Canadians in person for the warmth of the welcome they received.
It is likely they will be spending their time in the Commonwealth country when not in UK and may travel to America, Meghan’s homeland and where her mother lives.
Any move to Canada, even for a period of the year, would throw up important questions about Meghan and Harry’s long-term future within the royal family.
Meghan, a former actress, lived and worked in Toronto during her time starring in the popular US drama Suits, and the couple were famously pictured together when Meghan joined her then-boyfriend Harry at the 2017 Invictus Games in the city.
The cost of security for the couple would also be an issue, and as Canada is a realm, a country where the Queen is head of state, it may have to pay for keeping the couple and their son Archie safe.
The couple’s aim to be “financially independent” may point towards them seeking a job, or a paid role with an organisation whose aims compliment their own beliefs. Other members of the monarchy who have salaried jobs include the Queen’s grandchildren Princesses Beatrice and Eugenie and Peter Phillips, who all work for a living.
The announcement from Harry and Meghan follows Prince Andrew’s announcement last month that he was stepping back indefinitely from royal duties, after a disastrous BBC interview in which he failed to give convincing answers about his friendship with paedophile Jeffrey Epstein, who committed suicide in a Manhattan jail last August.