Picture above taken in March 2013.
A statement from Buckingham Palace said: ‘Mr and Mrs Mike Tindall are very pleased to announce that Zara Tindall is expecting a baby in the New Year.
‘The Princess Royal and Captain Mark Phillips, Mr Phillip and Mrs Linda Tindall, and members of both families are delighted with the news.
‘This baby will be the first child for Mike and Zara and the third grandchild for The Princess Royal.’
The baby, due in the new year, will be the Queen’s fourth great-grandchild. It is not yet known whether the couple are expecting a boy or a girl.
32 year-old Zara is the Queen’s second eldest grandchild and won silver at the London 2012 Olympic Games, and is planning to take part in the Rio Games in 2016.
Asked if Zara still had the next Olympics on her schedule now she was a prospective mother, the spokesman said: ‘She can still compete, it totally depends on horses and whether she feels it's appropriate.’
Mike, 34, used to play rugby for England and is now a player-coach at Gloucester.
The couple met in Australia in 2003 before marrying in Edinburgh, Scotland in July 2011 in a ceremony attended by the Queen and senior royals.
Speaking at the beginning of the year, 32-year-old Zara said that she and Mike had no immediate plans to start a family. 'Before we got married, everyone was like "When are you going to get married," she said.
'Then as soon as we were, it was, 'When are you having kids?' In the future we'll see what happens, but we're not, sort of, putting a date down.'
The couple were pictured cheering Andy Murray to victory in the men's singles final at Wimbledon on Sunday afternoon.
The news comes as the Duke and Duchess of Cambridge await the arrival of their first baby.