"I've seen those reports this morning and I regard that as a matter for them," Senator Payne told ABC radio on Thursday.

"If that is something they wish to pursue and they think that they can be productive, effective, do what they want to do in their own lives in that way, then of course that's a decision I would respect and we would respect."

The Australian Monarchist League says the announcement comes as no surprise.

"The intense media intrusion into the duchess's family and unexpected criticism of the duke over jet travel whilst promoting environmental policies would have undoubtedly have firmed their decision," chairman Philip Benwell said.

"Prince Harry has enjoyed immense popularity in Australia and many people will be sorry to see him take a step backwards.

"However, being sixth in succession to the throne, his proposed semi-retirement will have no constitutional consequences for Australia."

The couple say they want to spend time in both the UK and North America while working to become financially independent.

Buckingham Palace has issued a short statement saying they understand the different approach the couple want to take but complicated issues will take time to work through.

Australian Associated Press