The Royal Foundation is the umbrella organisation for the couples’ charitable projects, which includes mental health initiative Heads Together, the Invictus Games and The Endeavour Fund.
William and Kate will remain with the original charity, which will be renamed the Royal Foundation of the Duke and Duchess of Cambridge.
Harry and Meghan will establish their own organisation by the end of the year.
The Royal Foundation said the decision was made following the conclusion of a review into its structure.
It said both couples will continue to work together in the future, including on the Heads Together mental health campaign.
Sources deny any rumours of a rift between the couples, saying the decision was taken to "better align their charitable activity with their new households.”
In a statement released by Kensington Palace, a spokesman said: “The Duke and Duchess of Cambridge and The Duke and Duchess of Sussex are incredibly proud of what they have achieved together through The Royal Foundation.
“They are especially proud to have established a charity that has had, and will continue to have, significant long-lasting impact, changing lives for the better.”
They added that Kate and William “wish to build on The Foundation’s past successes.”
On Wednesday, William and Harry held a Trustees’ Meeting at Kensington Palace, where it’s believed they confirmed the separation.
Harry, Meghan, Kate and William only appeared once together at the Royal Foundation’s first Q&A forum in February 2018, which led to them being dubbed ‘The Fab Four.’
Brothers William, 36, and Harry, 34, set up the Royal Foundation in 2009 to house all of their charitable ventures.
Kate, 37, joined when she became the Duchess of Cambridge in 2011, as did Meghan, 37, when she became the Duchess of Sussex last year.
Reports that the Sussexes would separate from the joint charity foundation emerged at the end of last month.
A charity source previously told The Sun: “At the start of last year, the plan was that all four would work together and I really believed in them as the power of four.
“The forum was going to be an annual event and last year’s was supposed to be the first of many. It’s very sad it’s going to end like this.”
In March, the Sussexes formally split from their joint royal household with Kensington Palace and now have their own team, headed up by PR guru Sara Latham at Buckingham Palace.
The couple then moved to their new residence Frogmore Cottage in Windsor ahead of the birth of their son Archie Harrison Mountbatten-Windsor.
The Cambridges and Sussexes were last seen together in public at Trooping the Colour earlier this month, to mark the Queen’s official birthday.
Meghan and Harry shared a carriage with Kate and the Duchess of Cornwall.
Rumours of a falling-out between the couples began to emerge at the end of last year.
While there were reports of a rift between Meghan and Kate, The Sun’s royal correspondent Emily Andrews told Yahoo UK’s ‘The Royal Box,’ that the tension was actually between brothers William and Harry and that they did not see each other in private for six months after the royal wedding last year.
Andrews said: “I think behind the scenes, Harry and William’s relationship has always been up and down actually but of course, we’ve never really seen that.”
She thinks that the split of their joint royal household “has improved matters” between the pair.