"Their royal Highnesses The Duke and Duchess of Cambridge are very pleased to announce that The Duchess of Cambridge is expecting their third child," the palace statement read.
"The Queen and members of both families are delighted with the news," it added.
As with her two previous pregnancies, Kate is suffering from hyperemesis gravidarum, which involves nausea and vomiting more severe than the typical morning sickness many women suffer during early pregnancy.
The illness has forced Kate, 35, to cancel a planned engagement at the Hornsey Road Children's Centre in London, which had been due to take place on Monday morning. She is being cared for at Kensington Palace, the statement said.
CNN understands the Duchess is not yet past the 12-week mark -- when women usually get their first scan -- but the couple chose to make the early announcement because of her sickness.
Kate was only a few weeks pregnant with Prince George in 2012 when she had to be hospitalized for the condition leading to an early announcement.
During her second pregnancy, the Duchess was treated at Kensington Palace.
The newest tiny royal will be a sibling to four-year-old Prince George and two-year-old Princess Charlotte -- the royal couple's first two children.
Regardless of whether the child is a boy or a girl, the baby will become the fifth in line to the throne behind big sister Charlotte, bumping Prince Harry down the line of succession.
A change in law after William and Kate wed gave women the same rights of accession to the throne as men.
The child will be Queen Elizabeth's sixth great-grandchild.
It's already a big week for the Cambridges as they prepare for George to start school at Thomas's Battersea in south London on Thursday.
The family moved back to the British capital this year so that they can take on more royal duties on behalf of the Queen and Prince Philip, who retired from public duties in August.
Since 2014, the pair have used Apartment 1A at Kensington Palace in London -- which underwent a $7.6 million overhaul in 2014 -- as their official residence.
Prince William, 35, had been working as an air ambulance helicopter pilot for the past two years. It was the first time a royal who is in direct line to the throne had taken a civilian job; he donated his salary to charity.