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The Duke of York will not join the rest of the Royal Family for the traditional Christmas gathering in Sandringham, royal sources have told the BBC.
It is expected that Prince Andrew will "honourably withdraw" from Royal Family events at Christmas to avoid being a distraction.
He is instead expected to stay at home in Windsor on Christmas Day.
It comes after an alleged Chinese spy, linked to the prince, was named following a High Court judgement.
Yang Tengbo, also known as Chris Yang, had been banned from entering the UK.
In a statement on Monday, the Chinese businessman denied being a spy and said he had "done nothing wrong or unlawful".
Prince Andrew's office said nothing sensitive had ever been discussed with Mr Yang, who it is alleged was part of an operation to get close to figures of influence.
But with the controversy over his links to Mr Yang continuing to make headlines, it has now been revealed that unlike in previous years, Prince Andrew will not be at Sandringham.
The Christmas morning church service is a big event in the royal calendar, bringing together the Royal Family for a public appearance, with crowds and photographers capturing the moment.
There had been reports that Prince Andrew was privately being urged to keep a low profile this Christmas, to avoid him becoming the talking point if he attended the Sandringham gathering. There were concerns that his presence could overshadow the occasion.
It means he will miss an event he has previously attended - as even though he is no longer a working royal, and having stepped back from public life, he would still usually be at such family occasions.
The Prince of Wales recently revealed that there would be 45 guests at their royal Christmas dinner, which now might be down to 43.
Prince Andrew's ex-wife Sarah is also expected to be in Royal Lodge in Windsor for Christmas.
Their daughters, Princess Beatrice and Princess Eugenie were thought to have already planned to spend Christmas with their respective in-laws this year.
Mr Yang was previously known in court documents and news stories as "H6", due to an anonymity order protecting his identity.
But a judge ruled on Monday that the Chinese businessman could be named.
Mr Yang, who had been identified as having an "unusual degree of trust" with Prince Andrew in a court ruling, said it was "entirely untrue" that he was a spy.
He was invited to the prince's birthday party in 2020 and was told he could act on the royal's behalf when dealing with potential investors in China.
He was also told in a letter by one of Prince Andrew's advisers: "Under your guidance, we found a way to get the relevant people unnoticed in and out of the house in Windsor."
Last week, the UK's semi-secret national security court upheld a 2023 ban on alleged spy Mr Yang entering the country.
Mr Yang had gone to the Special Immigration Appeals Commission (Siac) to appeal against the decision.
But it decided the ban should remain because of suspicions that he had been involved in an "elite capture" operation - a tactic of the Chinese state to exert influence in Western nations.
Prince Andrew previously said in a statement that he had "ceased all contact" with the Chinese businessman, with all meetings having been "through official channels" and "nothing of a sensitive nature ever discussed".
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