Exiting senior royals Prince Harry and Meghan Markle will no longer use their HRH titles or receive public funds for royal duties, the Queen has confirmed.

The couple will also pay back about 2.4 million pounds ($3.12 million) in taxpayers’ money for the refurbishment of Frogmore Cottage which will remain their home while in the UK.

Buckingham Palace announced details of the sensational royal split, dubbed ‘Megxit’ by the British press, which will take effect in the UK spring.

Under the new arrangements, the couple, who married in 2018, will no longer be ‘working” members of the British monarchy.

A statement from the Queen said the agreement came after “many months of conversations and more recent discussions”.

“Harry, Meghan and Archie will always be much loved members of my family,” the Queen said.

“I recognize the challenges they have experienced as a result of intense scrutiny over the last two years and support their wish for a more independent life.”

The Queen has announced a way forward for her grandson Harry and wife Meghan. Photo: Getty

The Queen is “pleased that together we have found a constructive and supportive way forward for my grandson and his family,” the statement said.

“I want to thank them for all their dedicated work across this country, the Commonwealth and beyond, and am particularly proud of how Meghan has so quickly become one of the family.

“It is my whole family’s hope that today’s agreement allows them to start building a happy and peaceful new life.”

Bottom line: Meghan/Harry wanted to have their cake & eat it, but the Queen just took the cake back to the royal kitchens. pic.twitter.com/v635IKyfEn

— Piers Morgan (@piersmorgan) January 18, 2020

Buckingham Palace said the couple would step back from royal duties which included official military appointments.

“They will no longer receive public funds for royal duties,” the statement said.

“With the Queen’s blessing, the Sussexes will continue to maintain their private patronages and associations.

Prince Harry’s last official duty was at Buckingham Palace on January 17. Photo: Getty

“While they can no longer formally represent the Queen, the Sussexes have made clear that everything they do will continue to uphold the values of Her Majesty.

“The Sussexes will not use their HRH titles as they are no longer working members of the Royal Family.”

Harry, 35, and American former actress Meghan, 38, earlier this month announced they wanted to step back as senior royals and divide their time between the UK and North America, while also becoming “financially independent”.

After that revelation on Instagram, the Queen gave her blessing and has been working out with officials how this stepping back would happen in practice.

Meghan, 38, is currently in Canada with Archie, 8 months, and Harry, 35, is expected to join her soon.

UK media report the couple will be known as Harry, Duke of Sussex and Meghan, Duchess of Sussex.

After dropping the use of the HRH titles – His Royal Highness and Her Royal Highness – they will reportedly no longer be subject to oversight and would be free to undertake commercial deals.

Army veteran Harry will have to give up the military appointments he has as a senior royal.

Buckingham Palace did not disclose who would pay for the couple’s security going forward. It currently is taxpayer-funded.

“There are well established independent processes to determine the need for publicly funded security,” the palace said.

While they will no longer receive public funding, Harry’s father Prince Charles, the heir to the throne, will continue to offer private financial support, a royal source told AAP.

The source said the couple will spend the majority of their time in North America, and had not signed any commercial agreements as yet.

-with AAP