It is understood Britain's Queen Elizabeth II was not warned about plans by Prince Harry and his wife Meghan to announce that they are stepping back as senior members of the royal family.
The couple also said they want to become financially independent and split their time between the UK and North America.
Buckingham Palace released a statement shortly afterwards, saying that these are complicated issued that will take time to work through.
In a statement shared on Instagram, 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."
They added that they 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".
Harry and Meghan continued: "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.
"We look forward to sharing the full details of this exciting next step in due course, as we continue to collaborate with her majesty the Queen, the Prince of Wales, the Duke of Cambridge and all relevant parties.
"Until then, please accept our deepest thanks for your continued support."
A Buckingham Palace spokeswoman said: "Discussions with the Duke and Duchess of Sussex are at an early stage.
"We understand their desire to take a different approach, but these are complicated issues that will take time to work through."
On Tuesday, Harry and Meghan resumed their royal duties after taking a family break in Canada.
Towards the end of last year, both Harry and Meghan admitted they were struggling with the headlines and attention from British tabloid newspapers in a documentary which aired on ITV.
Meghan also revealed her friends told her not to marry Harry, warning her she "shouldn't do it because the British tabloids will destroy your life".
In an interview with ITV, she said not many people had asked if she was OK and admitted living in the public eye as a new mother had been a "struggle".
As part of the documentary detailing Prince Harry and Meghan's 10-day tour of Africa, Harry also opened up about his grief following his mother, Princess Diana's, death.
He said he felt considerable pressure being part of the Royal Family in the spotlight, and every camera flash took him back to his mother's death.
"I think being part of this family, in this role, in this job, every single time I see a camera, every single time I hear a click, every single time I see a flash, it takes me straight back, so in that respect it's the worst reminder of her life, as opposed to the best," he said.