Prince Harry and Meghan did not consult the Queen before announcing they would "step back" as senior royals, according to the BBC.
It is understood the Duke and Duchess of Sussex had just begun talks with the Queen and Prince of Wales about their future roles when they made their decision to publicly announce their plans to become financially independent.
Senior royals are reportedly "hurt" by the announcement, and Buckingham Palace warned the couple their decision to retire from the Royal Family front line would be "complicated".
A 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."
In a statement posted to their Instagram account yesterday, the Sussexes wrote: "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 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 couple's move follows weeks of speculation about their future after they took an extended break from royal duties over the festive period.