Prince William and his wife Kate have named their two-day-old baby Charlotte Elizabeth Diana and she will be known as Princess Charlotte of Cambridge, their Kensington Palace residence announced on Monday.

The Duke and Duchess of Cambridge are delighted to announce that they have named their daughter Charlotte Elizabeth Diana.

— Kensington Palace (@KensingtonRoyal) May 4, 2015

The baby will be known as Her Royal Highness Princess Charlotte of Cambridge.

— Kensington Palace (@KensingtonRoyal) May 4, 2015

The names will be seen as a triple homage to her grandfather Prince Charles, great-grandmother Queen Elizabeth II and William's late mother Diana, whose death in 1997 prompted a global outpouring of grief.

"The Duke and Duchess of Cambridge are delighted to announce that they have named their daughter Charlotte Elizabeth Diana," the palace said in a statement.

"The baby will be known as Her Royal Highness Princess Charlotte of Cambridge," it added.

The name Charlotte was one of the favourites for bookmakers and it has historic royal standing.

King George III's wife Queen Charlotte (1761-1818) was an amateur botanist who used her middle name instead of her first name Sophie.

George IV also named his only child Charlotte but she died in childbirth at the age of 21 in 1817.