Queen Elizabeth has agreed to a "period of transition" in which Prince Harry and Meghan Markle can split their time between Canada and the UK.
The announcement came after "crisis talks" were held in Sandringham today involving senior royals including the Queen, Prince Charles, Prince William and Prince Harry.
Meghan was thought to have taken part in the conversation via a conference call from Canada where she is looking after the couple's son Archie.
The Queen issued a statement this evening saying that the talks on the future of Harry and Meghan had been "constructive".
The final decision on how the couple will organise their time and finances will be made in the coming days, the British monarch said in a statement released by Buckingham Palace.
Last Thursday, Harry and Meghan said in a statement on Instagram that they were stepping back as senior members of the royal family and wished to become financially independent.
They said that while they plan to balance their time between the UK and North America, they would "continue to fully support her majesty the Queen".
Buckingham Palace released a statement shortly afterwards, saying that these are complicated issues that would take time to work through.
Following today's meeting, however, the Queen that she and her family were "entirely supportive of Harry and Meghan's desire to create a new life as a young family".
She said: "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.
"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.
She concluded: "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."
The news comes after a joint statement from brothers William and Harry this morning, saying that an "offensive and potentially harmful" newspaper report about their relationship is false.
The statement is believed to have been in response to a story alleging that the Sussexes felt "bullied" and unwelcome by William.
Reporting by IRN