Prince Harry and Meghan will no longer use their HRH titles and will not receive public funds for royal duties, Buckingham Palace has announced.
The couple no longer formally represents the Queen.
The Duke and Duchess of Sussex intend to repay taxpayer money for Frogmore Cottage, which will remain their UK family home.
The new arrangement comes into effect this spring.
The Queen held talks with the couple about their future, following their announcement that they wanted to “step back” as senior royals and divide their time between the UK and Canada.
The Queen said following “many months of conversations and more recent discussions” she was “pleased that together we have found a constructive and supportive way forward for my grandson and his family”.
“Harry, Meghan and Archie will always be much loved members of my family,” the statement continued.
She shared “particularly proud of how Meghan has so quickly become one of the family.”
On Sunday, the Queen made her first public appearance since the announcement, arriving at church with the Duke of York.
Meanwhile Buckingham Palace said: “The Sussexes will not use their HRH titles as they are no longer working members of the Royal Family.”
HRH, an abbreviation of His/Her Royal Highness, is used as part of the title of some members of the royal family.
A BBC royal correspondent: “When they first issued that statement about what they wanted, they talked about forging this progressive role within the Royal Family, about stepping back from royal duties. This isn’t stepping back, it’s stepping away entirely.”
The question that will “hang over them” for the next year is what their commercial life will look like. “This will be a test of the integrity of Harry and Meghan.”