Queen Elizabeth announces agreement with Meghan and Harry

The couple will give up state funding and be allowed to earn money in the private sector.
5:39 | 01/19/20

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Transcript for Queen Elizabeth announces agreement with Meghan and Harry
As we come on the air, we have new video of Britain's queen Elizabeth heading into church on this morning after a history-making announcement. On Saturday, the queen releasing the news. Prince Harry and his wife, Meghan, are making a radical break, ceasing to be working members of the royal family. The decision stunning the royal family and many in England, but the queen did have warm words for the breakaway Royals. We begin our coverage this morning with ABC's lama Hasan who is outside Buckingham palace. Good morning to you, lama. Reporter: Yeah. Good morning to you, Eva. It is a new dawn here. A huge day for the royal family as Harry and Meghan will no longer be representing the queen in any capacity. They are now free to earn a living as they embark on a new life together, spending most of their time in North America. This morning, the queen stepping out for the first time since striking a deal with Harry and Meghan, seen heading to church in sandringham. The queen confirming prince Harry and his wife, Meghan, are stepping back from all royal duties. The queen issued a warm and personal statement last night saying she recognizes, quote, the challenges they have experienced as a result of intense scrutiny over the last two years, and that she supports their wish for a more independent life, however, she has rejected their idea of being part-time Royals. The palace confirming the couple will no longer represent her majesty, nor will they use their royal highness titles, but they will still be known as the duke and duchess of Sussex. They will also no longer receive public funds, and are now free to earn a living. This comes at a cost. Harry and Meghan have pledged to return $3 million in public funds that was spent on refurbishing their Windsor home, frogmore cottage. Harry will no longer hold onto his military titles or ambassador role. The prince will fund them their own money until they have established a deal. These deals which they haven't struck yet, they will have to be respectful to the monarchy and the queen. Reporter: The queen publicly thanking the couple for their work saying, Harry, Meghan and Archie will also be much loved members of my family, giving a special mention to Meghan saying, I am particularly proud of how Meghan has quickly become part of the family. She sympathizes as a grandmother, but the queen who wears the crown has to make tough decisions, and she has defended the position of monarchy above all else. Reporter: Palace sources also revealing that Harry and Meghan now plan to spend the majority of their time in North America but will now keep their property in the uk, frogmore cottage, and they will now pay rent. The couple will be transitioning into this new role, and we may very well see them carrying out some royal duties before then. They have agreed to review this new arrangement in a year's time. Thanks to lama. Joining us is royal contributor, Victoria Murphy. Thank you for joining us. What do we know about this agreement right now? Titles, money. Where will they live? What will they do? Reporter: Hi there. Hi. Absolutely seismic change for prince Harry and Meghan and the British royal family today. They will no longer be working Royals. There will be no more official visits from spring on behalf of the queen. They will no longer be receiving public funds, and they will pay back the ones spent renovating their official residence, and they will obtain, but not use their titles, his and her royal highness, and Harry will be stepping back from his roles as ambassador and also if his military and honorary military appointments and in exchange, they will get what it seems is most important to them, which is their freedom. They will be able to split their time between the uk and north America and also to run their foundation as they wish. Victoria, how big of a deal is this? Have we ever seen something like this before with the royal family? Reporter: We've never seen anything like this before. This is a huge deal. This couple have been so unhappy, and this is the reason that they have decided to step back. It was made very clear in the queen's statements a week ago that the rest of the family wanted them to remain as working Royals, but they have made this decision, and I think there will be a lot of sadness because Harry has been such a popular member of the royal family his whole life. He and Meghan were galvanizing a young audience on the world stage, but this is the decision they have made. It's a very personal decision about their happiness. You mentioned Harry and Meghan have to repay the $3.1 million they spent to refurbish their home. Do they have that kind of cash on hand? What do we know about how they will actually make a living? Reporter: Yeah. We believe that they do. I mean, Harry has inheritance, and Meghan earned a good living as an actress on "Suits." We also understand that they are still going to receive some money from prince Charles, his private income, and of course, the sky is the limit when it comes to earning money because they are two hugely high profile individuals and I'm sure people will be offering them amazing Deets, but what they have said is they will only take things that still respect the integrity of the queen and the values that she upholds. So it's clear that they are still very much thinking of the family in their future roles. All right, Victoria Murphy for us in London this morning. As lama mentioned, they will revisit this in a year. So this could all still change or it could stay the same. Interesting Harry is giving up his military titles. Sounds like a big concession at the end of the day. Eva, thank you.

This transcript has been automatically generated and may not be 100% accurate.

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