The Queen expressed her sadness at losing Prince Harry and Meghan Markle as senior members of the royal family following talks at Sandringham.
The Duke and Duchess of Sussex will officially step back as senior members of the royal family and split their time between the UK and Canada.
Buckingham Palace made the historical announcement following Monday's crisis talks at Sandringham where Her Majesty, Prince Charles and Prince William discussed Prince Harry's future in the royal family.
The 93-year-old monarch said: "Today my family had very constructive discussions on the future of my grandson and his family.
"My family and I are entirely supportive of Harry and Meghan's desire to create a new life as a young family.
"Although we would have preferred them to remain full-time working members of the Royal Family, we respect and understand their wish to live a more independent life as a family while remaining a valued part of my family."
After expressing her disappointment that the couple would be quitting royal life, she confirmed there would be a 'transitional period' while the final deal is hammered out.
"Harry and Meghan have made clear that they do not want to be reliant on public funds in their new lives."
"It has therefore been agreed that there will be a period of transition in which the Sussexes will spend time in Canada and the UK."
"These are complex matters for my family to resolve, and there is some more work to be done, but I have asked for final decisions to be reached in the coming days."