"Lili is named after her great-grandmother, Her Majesty The Queen, whose family nickname is Lilibet," the couple said in a statement. "Her middle name, Diana, was chosen to honor her beloved late grandmother, The Princess of Wales."
Friends of Harry told Vanity Fair that the Duke of Sussex asked for his grandmother's "blessing" before naming his daughter.
"He loves and respects his grandmother," one of his friends said to Vanity Fair. "For Harry these are two very important and meaningful names."
Insider has confirmed the Duke of Sussex spoke to the Queen ahead of the announcement of Lilibet's name.
As royal biographer Sally Bedell Smith told Vanity Fair, it's not unusual for royals to ask for permission before naming their children after monarchs.
"I know when the Duke and Duchess of York (later George VI and Queen Elizabeth) proposed to name their second daughter Ann Margaret, King George V and Queen Mary objected to 'Ann,' so they settled on Margaret Rose," Bedell Smith told Vanity Fair.
"She is more than we could have ever imagined, and we remain grateful for the love and prayers we've felt from across the globe," the couple said of their daughter in a statement on the website for their organization, Archewell. "Thank you for your continued kindness and support during this very special time for our family."
NewsletterSIMPLY PUT - where we join the dots to inform and inspire you. Sign up for a weekly brief collating many news items into one untangled thought delivered straight to your mailbox.