Prince Harry and Meghan Markle are intending to "step back as senior members of the Royal Family".
The pair made the announcement via a "personal message" that was also posted on the Sussex Royal Instagram. They say they will "work to become financially independent, while continuing to fully support Her Majesty The Queen".
ITV's royal editor Chris Ship says this is the equivalent of "resigning" from the family.
"It is with your encouragement, particularly over the last few years, that we feel prepared to make this adjustment," the statement says.
"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."
The Prince and Duchess - who was born in the United States - said the decision came after "months of reflection and internal discussions". They have been holidaying in Canada over the few weeks with their new son Archie and Meghan's mother, Doria Ragland.
Both Harry and Meghan have been under an intense media spotlight since their marriage in 2018. Late last year, the pair said they were suing Associated Newspapers over the publication of a private letter - a rare move for members of the royal family who normally attempt to ignore press comment.
Announcing the legal action, the Duke of Sussex invoked his mother, Princess Diana, who died in a car crash being chased by paparazzi.
"My deepest fear is history repeating itself. I've seen what happens when someone I love is commoditised to the point that they are no longer treated or seen as a real person. I lost my mother and now I watch my wife falling victim to the same powerful forces."
He said he and his wife respect "media freedom and objective, truthful reporting", but claimed Markle has become a victim of tabloid press "that wages campaigns against individuals with no thought to the consequences - a ruthless campagin".
"I cannot begin to describe how painful it has been," he said.