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The Queen said in a statement: "Following many months of conversations and more recent discussions, I am 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."
Buckingham Palace said in a separate statement: "The Sussexes will not use their HRH titles as they are no longer working members of the Royal Family."
HRH is an acronym for His/Her Royal Highness used as part of the titles for some of the Royals.
It was confirmed that the couple will be 'required to step back from royal duties' and therefore won't earn any public funds from them.
It added: "This new model will take effect in the Spring of 2020."
It comes after the pair decided to announce that they were stepping back from as senior royals on Instagram after reports of unrest within the family.
Prince William and Prince Harry also took the unusual step of releasing a joint statement in which they denied reports that Prince Harry has been bullied out of the Royal Family.
The statement was released by Buckingham Palace, hours before senior royals were due to have talks at the Queen's residence in Sandringham to address the fallout from the recent developments.
It reads: "Despite clear denials, a false story ran in a UK newspaper today speculating about the relationship between The Duke of Sussex and The Duke of Cambridge.
"For brothers who care so deeply about the issues surrounding mental health, the use of inflammatory language in this way is offensive and potentially harmful."
In an article published by The Times, William is reported to have said: "I've put my arm around my brother all our lives and I can't do that any more; we're separate entities.
"I'm sad about that. All we can do, and all I can do, is try and support them and hope the time comes when we're all singing from the same page. I want everyone to play on the same team."
On their joint Instagram account, Harry and Meghan said: "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."
Featured Image Credit: PA
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