Palace sources claim there was "nothing available as an official residence in London".
Prince Harry and Meghan are busy preparing to welcome their first child in the spring, and chief among their decisions was where they'll live with their little one.
The estate is the site of Frogmore House, a attractive 17th century manor which has been a royal residence since 1792, which was where Harry and Meghan had their evening reception after their wedding in May.
The Duke and Duchess of Sussex, who are moving to a cottage in the Windsor Estate next year, Kensington Palace said.
The Sussexes have been living at Nottingham Cottage at Kensington Palace since announcing their engagement in November past year.
"The Duke and Duchess's official office will continue to be based at Kensington Palace", they added.
The cottage is now divided into five units which were home to royal staff.
More news: With Ohio State looming, MI still #4 in CFPIt's no surprise that they've chosen to live in Windsor. King Edward VIII and Wallis Simpson are also buried at the prestigious location, which is only open to the public on three days per year.
It's not far from Windsor Castle, the Queen's summer residence, and St George's Chapel, where Harry and Meghan tied the knot in May as millions around the world watched on TV.
The wedding of Harry, 34, and Meghan, 37, took place last May at Queen Elizabeth's residence Windsor Castle and the wedding reception was at Frogmore House, near their new home.
The statement notably comes shortly after the news that Harry and his brother, Prince William, are planning to make a formal division in the monarchy, and there have been reports that there is some tension between the brothers.
Queen Victoria in particular was said to love the peace and quiet at Frogmore.
"They need more room and hope Frogmore Cottage will be ready in time for when they have the baby", the source said. She spent long periods there after the death of her husband and her favourite "Munshi" (teacher) Abdul Karim, once lived at Frogmore Cottage.
The couple, whose royal titles are the Duke and Duchess of Sussex, revealed the pregnancy back in October to much fanfare.
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