But a Buckingham Palace spokeswoman said the Duke had requested to forego the planned promotion until he is able to fully resume royal duties.
“By convention, the Duke of York would be in line for military promotion on his 60th birthday,” the spokeswoman said.
“Following the decision by His Royal Highness to step back from public duties for the foreseeable future, the Duke of York has asked the Ministry of Defence if this promotion might be deferred until such time that His Royal Highness returns to public duty.”
The Duke stepped down from public duties last year over his friendship with convicted sex offender Epstein.
His decision comes after the Government announced that councils are no longer required to fly flags to mark the Duke’s birthday on February 19.
Downing Street said the matter was being looked into after critics branded the celebration “crass and offensive”.
A Government spokesman said: “The Department of Culture, Media and Sport will be advising councils that there is no requirement to fly flags on February 19 following the decision by the Duke of York to step back from public duties for the foreseeable future.”
The decision will also apply to other government buildings.
However, a spokeswoman for Westminster Abbey said the Duke’s birthday will still be marked by the traditional ringing of bells.
“Westminster Abbey is a Royal Peculiar and the bells are rung for the birthdays of HM The Queen and HRH The Duke of Edinburgh; their children; and TRH The Duke and Duchess of Cambridge and their children.
“There are no plans to change these arrangements.”