In a video published to the couple's shared Instagram account Sunday, the Duke of Sussex tells the crowd at a private fundraising dinner in Dubai that he had "no other option" after years of "so many challenges."
"What I want to make clear is we're not walking away, and we certainly aren't walking away from you. Our hope was to continue serving the Queen,the commonwealth, and my military associations, but without public funding. Unfortunately, that wasn't possible," he said.
He also said he hopes this decision brings him a more "peaceful life."
The royal family detailed the terms of their agreement with the Duke and Duchess of Sussex Saturday, which will go into effect in the spring.
Among them are the the couple's stripping the titles His Royal Highness and Her Royal Highness, as well as paying back taxpayer money for home rennovations.
"Following many months of conversations and more recent discussions, I am pleased that together we have found a constructive and supportive way forward for my grandson and his family. Harry, Meghan and Archie will always be much loved members of my family," Queen Elizabeth II said in a statement.
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The Queen also added that her grandson's family will continue "to uphold the values of Her Majesty."
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The couple previously stated they intend to become financially independent and will "balance" their time between the U.K. and North America.
The Associated Press contributed to this report.