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However, while the 93-year-old monarch's future garments will be made with fake fur, she will not dispose of old outfits that have real fur.
"As new outfits are designed for The Queen, any fur used will be fake," a Buckingham Palace spokesperson said.
"We are not suggesting that all fur on existing outfits will be replaced, or that The Queen will never wear fur again. The Queen will continue to re-wear existing outfits in her wardrobe."
Over the years, Elizabeth II has been photographed in an array of fully fur or fur-trimmed outfits including evening stoles, ceremonial robes, winter hats and coats.
Animal rights group People for the Ethical Treatment of Animals (PETA) welcomed the move.
"We're raising a glass of gin and Dubonnet to the Queen's compassionate decision to go fur-free," PETA UK wrote on its Twitter feed, a reference to the Queen's favourite drink.
The news follows steps by several fashion houses to go fur-free and improve their green and ethical credentials as consumers became more environmentally aware.
Last year, London Fashion Week, a trade event where designers present their latest creations on the catwalk, declared itself fur-free for the first time.