The Sun says the queen invited the couple to share Buckingham Palace with her as their official London residence.
She and Prince Phillip would still use the palace Monday to Thursday but on weekends, the prince and future princess would be the only royals in residence.
The pair needs a London base, but they will spend most of their first year in North Wales where Prince William works.
Meanwhile, it seems Middleton has made one of the most important decisions about her upcoming wedding.
People magazine said she's chosen a designer to create her wedding gown, but the identity will remain a secret as is the couple's wish.
There is some speculation that it could be British designer Bruce Oldfield.
Middleton's mother and sister were spotted heading to his store in the Knightsbridge area of London.